AGENDA TOWN OF STOKESDALE REGULAR TOWN COUNCIL MEETING 8325 ANGEL-PARDUE ROAD STOKESDALE, NC27357 NOVEMBER 10, 2022 AT 7:00PM  Available Venues to Watch/Attend:  a) Attend in Person at Stokesdale Town Hall in Council Chambers at 7 PM. b) View Live Stream on Town of Stokesdale's YouTube Channel at' 7 PM: itps/www.youtube.com/chamnel/UCIH7T00 56F EDH6wliA/live View & Participate (Citizen Comments) Virtually via Zoom at 7PM: tps/nsU/web.z0om.INIR49A9669EPNG-MISNIMMIMIVIZAKo413Y4NIRtZ209  Meeting ID: 849 8996 6907 Passcode: 925697 One Tap Mobile: 1-646-876-9923  1. 2. 3. 4.  Call to Order, Pledge of Allegiance, and Invocation  Review and Adopt the Agenda Public Safety Reports: Fire Department Administrative Reports: b) Planning Board: c) Events Committee: d) Property Committee:  a) Administrative Report from Deputy Town Clerk: Robbie Lee Wagoner II  e) Town Park Improvement Committee:  5. 6.  Financials: Finance/Budget Officer: Kim Thacker  Citizen's Comments from the Floor (3-Minute Limit per Speaker).  Page 1    NEW BUSINESS: 7.  Consideration of an Estimate submitted by Gauldin Plumbing for the materials and labor toi install 2 Woodford model 17 faucets with stem lock, work expected to cost Consideration of a Certification of] Municipal Declaration to Enact Speed Limits and Request for Concurrence for a speed limit reduction from 35 mph to 25 mph on Consideration of: a Resolution to call for a Public Hearing on the closing of a portion  between $1,000 and $1,250 plus NC Sales Tax.  8.  Angel-Pardue Road. of Angel-Pardue Road.  9.  10. Discussion of American Rescue Plan (ARP) Policy and Procedures. 11. Review ofl North Carolina Procurement Manual for 2022. 12. Review of North Carolina General Statute 143-129. 13. Discussion ofl Improvements to Town Water System. 14. Presentation by Town Park Improvement Committee. 15. Citizen's Comments from the Floor (3-Minute Limit per Speaker).  16. Council Comments. 17. Adjournment. ANNOUNCEMENI:  The' Town of Stokesdale Town Planning Board will hold a meeting on Thursday, November 17, 2022, at' 7:00 PMi inside the' Town Hall Council Chambers, located at The' Town of Stokesdale Town Council will hold a regular meeting on Thursday, December 08, 2022, at' 7:00 PM inside the Town Hall Council Chambers, located at  8325 Angel Pardue Road, Stokesdale, NC27357.  8325. Angel Pardue Road, Stokesdale, NC27357.  Page 2    NEXT LEVEL RECREATION OF THE CAROLINA'S INC. 4956 Long Beach Road SE. Suite 14, PMB Box 122  Southport, NC 28461 Proudly Representing: Superior RECREATIONAL PRODUCTS MADEI INTHE USAII!!  APLAYCORE Ceneay  Date: 10.27.2022 Town of Stokesdale P.O. Box 465 Stokesdale, NC 27357 Deubtyclerk@stokesdale.Org  BillTo:  Ship' To:  Town Hall-Stokesdale NC 8325 Angel Pardue Rd Stokesdale, NC 27357  Delivery 9-4 M-F, call before 336-643-4011  Quantity 1 2 2  Model TR32 Dome32blackHW Liner32  Description  Item Price Total Price  32 Gallon Receptacle-green, portable Dome Top for receptacle-Black Rigid plastic liner for TR32-black  685.00 included included  Freight Installation Subtotal Tax 6.75 Guilford Total  154.00 n/a 839.00 56.63 $895.63  Prices quoted are by approved terms. Validf for 30 days from date of quote. Terms 50% due with order or provide al Purchase Order. ATrash Receptacle must! be available fori install crew to dispose ofs shipping materials. Ifa container must be rented, added fees Ifwe! hitr rock upons start ofi install, customer will be responsible for any extra charges for equipment rental ore extral labor to excavate or Site must ber ready toi install, any extra grading or work needed toy prepare the site will add toi installation costs. Owneri is responsible fori identifying any underground utility that is NOT public. 811 onlyi identifies public utilities.  Balance is due upon receipt of goods or completion ofi installation if applicable. Any requiredf fees license orp permits are the responsibility oft the owner unless otherwise discussed.  may applyt tof final invoice.  drill asr needed top professionally install equipment.  Site preparation is owner's responsibility unless includedi ini install price. Equipment quotedi isl IPEMA Certified with ASTM, CPSC, and ADA guidelines met.  Cebied Eliapten Cobie Ellington, Sales Consultant cobie@ctc.net 704-763-3350 cell  Printed Name  Signature  Purchase Order Number    Balance! Sheet 10-22  Town of Stokesdale Balance Sheet 22-Oct  Total  Interest % Mature Date  ASSETS Current Assets Bank Accounts ARPA-F Fidelity Bank- -7869 Bank of Oak Ridge Checking (Money Market) Bank of Oak Ridge-CDARS CDAR- Acct# 1025707377 CDAR- Acct#1026227972 CDAR-ActP102837432 CDAR-Aeet-1028317459 CDAR -Acct# 1025607275 CDAR- -Acct# 1025707369 CDAR -Acct# 1026156862 CDAR- Acct# 1026249895 CDAR. -Acct./1025951758 CDAR-ACCL/025851766 CDAR -Acct# 1025892913 Total Bank of Oak Ridge-CDARS Fidelity Bank- 002762 Petty Cash Total Bank Accounts Accounts Receivable Salary &F.I.C.A. Duet from Water Enterprise Sales Tax 2022-2023 Water Enterprise Reimbursement Total Accounts Receivable Total Current Assets TOTAL ASSETS  723,965.00 23,314.99 270,200.18 0.16986% 279,499.57 0.29954% 630,349.76 1.24226% 3/30/2023 53,398.47 1.24226% 3/30/2023 313,876.73 0.16986% 171,524.33 0.16986% 139,606.20 0.24968% 431,257.00 0.29954% 45,184.19 0.16986% 12/1/2022 49,501.75 0.16986% 12/1/2022 178,231.22 0.07996% 11/10/2022  0.00% 0.30%  3/2/2023 3/2/2023 1/26/2023 3/2/2023 2/9/2023 3/9/2023  $ $  2,562,629.40 294,283.27 150.00 3,604,342.66 461.18 217.63 11,425.84 12,104.65 3,616,447.31 3,616,447.31  0.05% 0.00%  $ $  Page 10 of1    &  I    B    : 2  888 a : $ 889    f de & 00 00 ? 9 B  0 8 00 8 -  3 &  ACRREC & a R & K K R & R  a R  d:e  : -    0  CCRGRE aaa R R R R R R M Xacc  R R    aaaac    Balance Sheet October 22  Water Enterprise Account Balance Sheet As of October 31, 2022  Total  Interest % Mature Date  ASSETS Current Assets Bank Accounts Bank Of Oak Ridge CDARS CDAR- Acct# 1025459241 CDAR- Acct# 1025912485 CDAR- ACCtP1025385752 CDAR- Acct#1025961774 Total Bank Of Oak Ridge CDARS Capital Reserve Fund- CRF (0345) Fidelity-Water Enterprise (0504) NCCMT Regular Savings (0403) Total Bank Accounts Accounts Receivable AR- Water Sales Active- 90+Days Past Due Inactive : 90+Days Past Due Sales Tax Refund 2022-2023 Total Accounts Receivable TOTAL ASSETS LIABILITIES Liabilities Accounts Payable  248,890.29 74,400.40 116,289.43 500,198.78 186,490.17 625,497.48 527,304.90 45,055.55 1,884,546.88 27,437.35 0.00 OA Account 6,010.20 27 Accounts 270.00 33,717.55 1,918,264.43  0.17% 12/1/2022 0.08% 11/17/2022 0.17% 11/3/2022 0.05% 0.05% 0.02%  60,618.66 0.16986% 12/1/2022  Water Relmbursement due to General Fund Payrol! due to General Fund Account Total Accounts Payable Totall Liabilities TOTAL LIABILITIES  11,425.84 461.18 11,887.02 11,887.02 11,887.02  Page 1of1    - 1    ? 80            Gauldin Plumbing and Pump, Inc. PO. Box 516 8581 Belews Creek Rd. Stokesdale, NC27357-0516 (336)643-3857 Name /Address TOWN OF STOKESDALB P.O. BOX465 8325 ANGEL PARDUE: RD STOKESDALE, NC27357  Estimate Date 10/7/2022  JOBI NAME Park  Description  MATERIAL. ANDI LABOR- Install 2 Woodford model 171 Faucets W/Stem Lock Work expected to cost between $1000.00. - $1250.00 pluis NC Sales' Tax Price includes all materials ( insulation, pipe, valves, hangers, faucets,) and Labor  NCLICENSE#7068P    This unit offers anti-siphon, protection, The Freezeless Model 17 is designed and intended for outside temperature. Thist faucet willr notr rupture fromi freez- The Model 17 contains an integral backflow protection device which protects up to 125 psi of backpressure and This ASSE 1019 device is intended for irrigation use and outdoor watering and shall not be subjected to more than (12) hours of continuous water pressure. SPECIFICATIONS: Manufactured under one or more of the following patents: ReSONSONAEN ASSE 1019-Type C Listed CSA, CUPC Approved FEATURES: 3/4" maie hose thread nozzle Stainless steel seat - eliminates wire draw EPDM packing to prevent leaking Fuil circle operating threads on valve body and retainer No-lead solder Standard "O" size seat washer Powder-coated, die cast aluminum handle Optional Tee Key available (extra charge) Adjustable polycarbonate wall flange MAXI PRESSURE- 125 p.s.i. MAX TEMPERATURE- -1 120°F.  Freezeless  WOODFORD  year-round residential trrigation purposes regardless of Anti-Siphon ing when the valve is shut off and the hose is removed. Wall Faucet therefore does not require an add-on vacuum breaker. Model 17  Inlet Descriptions  Cinlet COMBINATION Copper Sweat Fitting 1/2" K,Lor MI Inside 3/4" M Only Outside CPI Inlet COMBINATION 1/2" Male Pipe Thread 1/2" Female Sweat C3'Inlet 3/4" Female Sweat Fitting P'lnlet COMBINATION 1/2"Female Pipe Thread 3/4" Male! Pipe Thread- PXInlet 1/2" PEX Tube Fitting PX3 INLET. 3/4" PEX Tubel Filtting Rinlet 1/2" Rehau Tube Fitting 1/2" Wirsbo WI Inlet Tube. Filtting W3 INLET. 3/4" Wirsbo PEX" Tube Fitting CMI Inlet 15/16. COMBINATION 1/2" Compression Fitting 1/2" Copper Sweat Fitting  15/16 105  .15/16 114  15/16  WARNING Faucet must be installed with downward pitch toward nozzle and hose must be removed in freezing weather or faucet may freeze and burst.  1/16  Rough-In Dimensions OVERALLLENGTH: SEE WALL INLET THICKNESS.  13/8.  11/16  13/8.  ALIGNING MARK  15/16 MD W3=1.,1/8 PX,PX3= 11/8, W=. R= 1314: 1.1/2 W3= 13/4  Wall7 Thickness (Inches) Shipping' Wt. Ea. (bs) shown inc chart above.  4 6 8 10 12 14 16 18 20 22 24 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 *Overall Length Dimension:. Add wall thickness and Inlet option length Forinstalation oubleshooting Instructioos goto www.woodordmigs com orcall 4-800:621-6032  1-1/4.  When ordering, specify model, inlet and wall thickness.  @2021 WOODFORD Mfg. Co.  Rev. 04/217 FormN0.17.114    WOODFORD    MODEL171 PARTS LIST TEM PART# DESCRIPTION: 1 30002 Handle Screw Whéel Handle Round 30096 Powder Coated: Die Cast) Aluminum 2a 50012 Tee Key (Optional) 30059 Packing Nut 3a 30512 Packing Nuty w/deep stem guard (Optional) 4 30560 EPDM Packing 5 30421 Packing Support Washer 6 35XXX Includest items 6,7889 7 30459 Check' Valve 8 30008 Valve Seat Bubber 9 30009 Retainer Screw 10 RK-17VB Vacuum Breaker Floatk Kit 11 30098 Adjustable Flange  DIM.' "A"  TH  VALVE STEME ASSEMBLY: DIM: "A"  Overall Length 57/8" 7718 97/8" 11718 137/8" 15718" 177/8" 197/8 217/8" 237/8 257/8"  Wall Thiokness 4 6. 8 10 12 14 16 18 20 22 24  Part No. 35720 35721 35722 35723 35724 35725 35736 35726 35737 35738 35727  Valve StemAssembly (Seecharta aty right)  RK17MHS Repair Kit (Inciudes items15 &7-10)  Woodford Excellence Since 1929 Proudly Madel In Thel U.S.A, Formore information contact...  WOODFORD MANUFACTURING COMPANY  2121 Waynoka Road, Cotorado Springs, Colorado 80915 . Phone: (800) 621-6032 . Fax: (800) 765-4115 To view our complete product line visit: www.woodfordimtg.com ore email: alerdpodloramig.com  AL Division OfWCMI Industries, Inc.  02021 WOODFORDI Mfg. Co.  Rev. 0421FormNo." 17.114    Certification of Municipal Declaration To Enact Speed Limits and Request for Concurrence  Concurring State Ordinance Number: 1082837 Division: 7 County: GUILFORD Type: Municipal Speed Zones Road: SR2102  Municipality: STOKESDALE  Car: 25 MPH  Truck: 25 MPH  Description: (Angle-Pardue Road) between US 158 and End of Maintenance a point 0.076 mile south and westo of SR: 2199  (Adano Rd)  Municipal Certification  Clerk of  do hereby certify that ther municipal  governing body, pursuant to the authority granted by G.S.2 20-141(), determined upon the basis ofa an engineering and above on the designated portion of the State Highway System, which shall become effective when the Department of Transportation has passed a concurring ordinance and signs are erected giving notice oft the authorized speed limit.  traffic investigation and duly declared, ont the.  day of  20  thes speed limits as set forth  The said municipal declaration is recorded as follows:  Minute Book:  Page:  Ordinance Number:.  Inwitness whereof, Ihave hereunto: set my hand and the municipal seal this  day.  of  20  (signature)  (municlpal seal)  Department of Transportation Approval  Division: Region:  Title: Title:  Date:. Date:  Page 1of1    North Carolina Department of Transportation Traffic Engineering Accident Analysis System  Features Report End 0.490  Inventorled Route ID 40002102  Begin Milepost Milepost 0.0  County GUILFORD  Beyond Route Loop Limits  Feature 0.000 20000158 US 158 0.017 40002101 SR 2101 0.017 50001177 ATHENS 0.362 40005039 SR 5039 0.362 40005040 SR 5040 0.414 40002199 SR 2199 0.414 50000191 ADANO  Distance to Next  Direction to Next  MP No  ID Feature Name/Type Special Type  At grade intersection, 4 legs 0.017 South and West At grade intersection, 4 legs 0.000 South and West At grade intersection, 4 legs 0.345 South and West At grade intersection, 4 legs 0.000 South and East At grade intersection, 4 legs 0.052 South and East At grade intersection, 3 legs 0.000 South and West At grade intersection, 3 legs 0.076 South and West  0.490 50039286 END OF MAINTENANCE Non-Intersection  0.000 South and West  10/27/2022  Page1of1    RESOLUTION NO. R-2022-05 RESOLUTION ADOPTED BY STOKESDALE TOWN COUNCIL CLOSING AND REMOVING FROM DEDICATION A PORTION OF ANGEL PARDUE ROAD  WHEREAS, a petition was filed, pursuant to G.S. 160A-299, requesting that the Town Council close and remove from dedication the following described Being that portion of said road, presently known as Angel Pardue Road (Secondary Road #2102) in Oak Ridge Township, as described further by metes and bounds in Exhibit A attached herein, Town of Stokesdale, NC. WHEREAS, pursuant to a resolution of intent to close said road adopted by this Council on November 10, 2022, notice was published in the Greensboro News and Record once a week for four consecutive weeks that a public hearing would be held concerning said petition on December 8, 2022, at 7:00 P.M. at Stokesdale Town Hall, 8325 Angel Pardue Road, Stokesdale, North Carolina; and WHEREAS, it appears that all owners of property adjoining said road have signed the petition or have been notified of the closing thereof; and WHEREAS, after inquiry by the Mayor, all interested persons were provided an opportunity to be heard on the request contained in the petition; and WHEREAS, after all interested persons were heard, it appears to the satisfaction of this Council that the removal of said road from dedication is not contrary to the public interest and that no individual owning property in the vicinity of said road will be deprived of any reasonable means of ingress  roadway:  or egress. to his/her property; NOW, THEREFORE, BE IT RESOLVED THAT:  1. - The following described road in Stokesdale is hereby closed and removed Being that portion of said road, presently known as Angel Pardue Road (Secondary Road #2102) in Oak Ridge Township, as described further by metes and bounds in Exhibit A attached herein, Town of Stokesdale, NC. 2. A certified copy. of this resolution, together with a copy of the published notice of the hearing is hereby ordered recorded in the Office of the Register of Deeds of Guilford County, North Carolina. IH HEREBY CERTIFY THAT THE FOREGOING IS A TRUE COPY OF A RESOLUTION ADOPTED BY THE STOKESDALE TOWN COUNCIL AT A MEETING HELD ON DECEMBER 8, 2022.  from dedication to the public use:  Mayor, Town of Stokesdale  ATTEST  Clerk, Town of Stokesdale  Case# 22-10-PLBD-00026    Exhibit A - Legal Description  COMMENCING FROM A FOUND IRON PIN ON THE EXISTING RIGHT-OF-WAY OF ANGEL PARDUE ROAD (DESCRIBED BOOK 5422, PAGE 775), SAID POINT BEING THE 'POINT OF BEGINNING'; THENCE, LEAVING SAID EXISTING RIGHT-OF-WAY OF ANGEL PARDUE ROAD (DESCRIBED IN BOOK 5422, PAGE 775) ON A BEARING OF S01028'00" E, A DISTANCE OF 171.22 FEET; THENCE, ON A CURVE TO THE LEFT, HAVING A RADIUS OF 325.00 FEET, A CHORD BEARING S04°56'26" E, AND AN ARC LENGTH OF 40.23 FEET; THENCE, ON A CURVE TO THE RIGHT, HAVING A RADIUS OF 215.00 FEET, A CHORD BEARING OF S41°41'21" w, AND AN ARC LENGTH OF 33.09 FEET; THENCE, BEARING $73'50/48"W, FOR A DISTANCE OF 119.99 FEET, TO A POINT ON SAID EXISTING RIGHT-OF-WAY OF ANGEL PARDUE ROAD (DESCRIBED IN BOOK 5422, PAGE 775); THENCE, ALONG SAID EXISTING RIGHT-OF-WAY, BEARING N32'47'59"W, A DISTANCE OF 13.88 FEET, TO A CORNER OF SAID EXISTING RIGHT-OF-WAY; THENCE, CONTINUING ALONG SAID EXISTING RIGHT-OF-WAY, N57'12'01'E, FOR A DISTANCE OF 83.70 FEET, TO A CORNER ON SAID EXISTING RIGHT-OF-WAY; THENCE, CONTINUING ALONG SAID RIGHT-OF-WAY, N47'11'46"W, FOR A DISTANCE OF 39.24 FEET; THENCE, CONTINUING ALONG SAID RIGHT-OF-WAY, N37'13'48"E, FOR A DISTANCE OF 44.05 FEET, TO A CORNER ON SAID EXISTING RIGHT-OF-WAY; THENCE, CONTINUING ALONG SAID EXISTING RIGHT-OF-WAY, N16'14'16'E, FOR A DISTANCE OF 32.81 FEET, TO A CORNER ON SAID EXISTING RIGHT-OF-WAY; THENCE, CONTINUING ALONG SAID EXISTING RIGHT-OF-WAY, NO0'56'54'E, FOR A DISTANCE OF 119.11 FEET, TO AN EXISTING FOUND IRON PIN ON THE EXISTING RIGHT-OF-WAY OF ANGEL PARDUE ROAD, SAID POINT BEING THE 'POINT  OF BEGINNING'. AND  COMMENCING AT A FOUND IRON PIN ON EXISTING ANGEL PARDUE RIGHT-OF-WAY (BOOK 5422, PAGE 775); THENCE, LEAVING THE EXISTING RIGHT-OF-WAY OF ANGEL PARDUE ROAD FROM SAID FOUND IRON PIN FOR A DISTANCE OF 304.56 FEET i ON A BEARING OF $10'17'31"W, TO A POINT ON SAID EXISTING RIGHT-OF-WAY LINE, SAID POINT BEING THE 'POINT OF BEGINNING'; THENCE, ALONG SAID RIGHT OF WAY, $57'12'01"W, FOR A DISTANCE OF 21.62 FEET, TO A POINT ON SAID RIGHT OF WAY; THENCE ALONG SAID RIGHT-OF-WAY, N32'47'59"W, FOR A DISTANCE OF 6.47 FEET, TO A POINT ON SAID RIGHT-OF-WAY; THENCE LEAVING SAID RIGHT-OF-WAY LINE, N73'51'52"E, FOR A DISTANCE OF 22.57 FEET, TO A POINT ON SAID EXISTING RIGHT-OF-WAY, SAID POINT  BEING THE 'POINT OF BEGINNING'.  Case# 22-10-PLBD-00026    CURRAGHMOREDR, 96415B  CURRAGHMORED DR  061  164462  164157  ADANORD  Portionof Angel Parcue-Roadtobe. Ciosedy andre ligned!  164121    pammaguralpoiwhneyimpali-aalif-lhe-stamlmhalwae  SCHOOL OF GOVERNMENT  MUNC  Coates' Canons NCLocal Government Law  American Rescue Plan Act of 2021 Coronavirus State and Local Fiscal Recovery  Funds (ARP/CSLFRF): The Standard Allowance  Published: 04/05/22  Last-Revised: October 27, 2022 Author Name: Kara Millonzi What is the Standard Allowance?  The, Final Rule implementing the ARP/CSLFRF authorizes 41 main expenditure categories:  1.A Addressing the COVID-19 public health emergency and its negative economic impacts: authorizing projects that address the ongoing pandemic or its negative economic impacts on certain households, 2. Premium pay: authorizing additional pay for local government employees (and employees in certain other sectors) for work performed in person during the pandemic and targeted to low or moderate income employees or those who experience unique financial or health risks from working during the 3.Necessary water; wastewater; stormwater; and broadband infrastructure: authoring investments in 4. Revenue replacement: authorizing expenditures for the provision of government services The Standard Allowance relates to the Revenue Replacement category. With the Interim Final Rule (which is no longer in effect), al local government had to use a detailed formula to calculate whether it experienced or will experience lost revenue growth over a 4-year period from 2020 through 2023. Ift the formula revealed lost revenue growth in any year, the local government could expend up to that amount in the Revenue Replacement category. Based on the formula most NC local governments did not experience lost revenue growth and are not projected to experience it for the remainder oft the calculation period. Again under the Interim Final Rule, that meant that most NC local governments could not expend any oft their ARP/CSLFRF funds as Revenue Replacement. Luckily, the. Final Rule (effective now) added another option- - the Standard Allowance. The Standard Allowance allows a local government to expend up to their full allotment of ARP/CSLFRF funds (up to a maximum of $10 million) in the Revenue Replacement category WITHOUT having to demonstrate any actual lost revenue growth. All local governments receiving from $1 through $10 million in  groups, areas, or the local government itself  pandemic  certain water, wastewater, stormwater, and broadband infrastructure projects  Copvright 02 2009 toF Present Schoolo ofGovernment: att thel Universitvo of North Carolina.    htpaenonsgumealwoayosfmatians acurylam-ctratama-mts-saeul-reowsy- aydaay  ARP/CSLFRF funds should elect the Standard Allowance. Local governments receiving over $10: million int total ARP/CSLFRF funds may elect either the Standard Allowance or the (now modified) Formula Approach, if the formula Why would a local government want to spend some or all ofits ARP/CSLFRF funds in the Revenue Replacement category? First, expending ARP/CSLFRF in the Revenue Replacement category allows for a much broader array of potential expenditures. A local government may expend ARP/CSLFRF funds in this category for the provision of government services. This likely includes anything that a local government has state. law authority to spend money on, including general fund and enterprise fund expenditures, capital and operating expenditures, and even administrative expenditures, such as employee salaries/benefits. US Treasury did not define "government services"  approach is expected to reveal more than $10 million in lost revenue growth.  but has provided non-exclusive lists of examples that illustrate how broad this category is:  From the US Treasury Final Rule Supplement  Government services include, but arei not limited to, "maintenance or pay-go funded building ofinfrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational serviçes; and the provision of  police, fire, and other public safety services." From the US Treasury Final Rule Overview  "Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive: Construction ofs schools and hospitals; Road building and maintenance, and other infrastructure; Health services; General government administration, staff, and administrative facilities; Environmental remediation; [and] Provision of! police, fire, and The Final Rule also allows Revenue Replacement funds to be used as the: non-federal match in other federal programs (assuming it is allowed by the other federal programs). Expending ARP/CSLFRF ini the Revenue Replacement category thus affords a local government the most flexibility to make the best possible investment with these one-time funds for its community. Second, US Treasury has significantly reduced the: reporting and compliance burden on Revenue  other public safety services (including purchase of fire trucks and police vehicles)."  Replacement expenditures relative to the other categories.  Does electing the Standard Allowance force the local government to make specific expenditures? No. Electing the standard allowance simply allows a local government to spend up to its full allocation of ARP/CSLFRF (up toa maximum of$101 million) on the provision of government services. It does not mandate specific expenditures and it does not prevent al local government from expending some or all ofi its ARP/CSLFRF funds in one or more oft the other Does electing the Standard Allowance automatically give every local government $10 million in ARP/CSLFRE funds? Unfortunately no. Electing the Standard Allowance does not change a local government's total allocation of ARP/CSLFRF funds. It allows al local government to spend up to its entire allotment (up to a maximum of $10million) in the Revenue Replacement category. The $10: million cap only applies to local governments whose total allocation exceeds  categories.  $10 million.  Copvright 02 2009toPresents Schoolo lofGovernment: attheU Univentiyefericaralm.    htps/canonssegincadw20np0afametlcan-esue-plan: of-202h-coronavus-satr-amd-loal-lsal-racvy-luns--amp-ahf-he-standard-allowance  Ifa local government elects the Standard Allowance does it have to spend all ofits ARP/CSLFRF (up to the $10 million maximum) in the. Revenue Replacementc category? No. Electing the Standard Allowance just indicates the maximum amount a local government may spend ini the Revenue. Replacement category (up to its total allocation or $10 million, whichever is lower). It does not require al local government to spend all, or even any, ofits ARP/CSLFRF funds in the Revenue Replacement category, although as detailed above there are advantages to a local government spending as much as possible as. Revenue Replacement because ofi its expenditure flexibility and more streamlined reporting. Ifal local government identified a project in another category, may it now spend ARP/CSLFRE funds on the same project through the Revenue Replacement category? Yes. Because the expenditure authority in the Revenue Replacement category is SO broad (the provision of government services), it encompasses all ofthe allowable  expenditures in the other categories.  When must a local govermment elect the Standard Allowance (or Formula Approach) for Revenue. Replacement? US Treasury initially required that a local government elect either the Standard Allowance or the Formula Approach for Revenue Replacement in the April 30, 2022 Project and Expenditure Report. But Treasury has subsequently indicated that it will allow a local government to make. this election at least through. the April 30, 2023 report. Does a local government have to know. how it will expend all ofi its ARP/CSLFRF funds to elect the Standard Allowance? No. Electing the Standard Allowance allows the local government to spend up toi its full ARP/CSLFRF (up to a maximum of$10 million). in the Revenue. Replacement category. Al local government does not have to know how it Does a local government need to adopt a budget for its ARP/CSLFRF funds to elect the Standard Allowance? No. A local government must adopt a budget (ideally: a grant project ordinance) before obligating or expending any ofits ARP/CSLFRF funds, but it does not have to adopt a budget or make any expenditure decisions before electing the Does a local government's governing board need to vote to approve the election of the Standard Allowance (or Formula Approach)? The law does not: require al board vote on this decision, however, a local government should follow its board's general directives or practices for these types of decisions. Some boards are: more involved ini the day-to-day What compliance requirements apply to Standard Allowance Revenue Replacement expenditures? As detailed  will expend its ARP/CSLFRF funds before electing the Standard Allowance.  Standard. Allowance (or Formula Approach).  operations of the government than others.  here, in July 2022, US Treasury significantly reduced the compliance requirements for Revenue  Replacement expenditures.  Alli rights reserved. Thisl blog posti isp published andj posted onlinel by the School of Goverment to address issues ofi interest tos government officials.' This blog posti isf fore educational: andi informational use andi mayl be usedf fort those purposes without permissionl by providinga acknowledgment ofi its source. Usec oft this blog postf for commercial purposes is prohibited.' Tol browse a complete catalogo of School of Government; publications, please visitt thes School's websiteat www.sog.uncedut oro contact thel Bookstore, School of Government, CB# 3330 Knapp-Sanders' Building, UNCChapel Hill, Chapel Hill, NC27599-330ge-mail  sales@sogunc.edu; telephoneg 919.966.4119; or fax 919.962.2707.  Copvright 02 20091 to Presents Schoolof Government: atti thel Unlyersitv ofNorth Carolina.    tp/amomsegunealwnepastafam-weromytaereiens-ar-reemues replacement- expenditures!  SCHOOL OF GOVERNMENT  MUNC  Coates' Canons NCLocal Government Law  American Rescue Plan Act of 2021: New (Fewer) Compliance Requirements for  Revenue Replacement Expenditures  Published: 09/01/22  Author Name: Kara Millonzi  As detailed inj previous.posts. the American Rescue Plan Act of2021 Coronavirus State and Local Fiscal Recovery Funds (ARP/CSLFRF) allows local governments to spend their allocations on eligible projects within four major expenditure 1.A Addressing the COVID-19 public health emergency and its negative economic impacts 2. Premium pay for eligible workers performing essential work during the pandemic (see blog.post on  groupings:  premium pay for local government employees) 3. Necessary water, wastewater, and broadband infrastructure 4. Revenue replacement for lost revenue growth  There are detailed Expenditure Categories (ECs), which are more like subcategories, within each of these four broader categories. See the Appendix to US Treasury's Compliance and Reporting. Guidance for the list of] ECs. Each project must be associated with one, and only one, EC. A project is a group of related expenditures. Projects in this context may Many local governments will spend all, and most local governments will spend at least a portion, of their ARP/CSLFRF funds in the revenue replacement category (EC 6.1 or 6.2). A local government may spend up to $10: million or its entire allotment of ARP/CSLFRF funds, whichever is lower, in this category, without. having to demonstrate any actual lost revenue growth. Yes, you read that correctly. A local government may expend its ARPICSLFRF allocation, up to a maximum ofs $10 million, in the revenue replacement category even ifit did not experience any revenue loss due to the pandemic. (See blog.post on the standard allowance.)Local governments with ai total ARP/CSLFRF allocation over $10 million may spend more than $10 million as revenue replacement ifa a detailed formula reveals more than $10 million in actual lost revenue growth due to the pandemic. Otherwise, they are capped at $10 million under what is known as the The benefit oft the revenue replacement category is that it allows a local government to spend its ARP/CSLFRF funds for almost any purpose authorized by state law, with fewer compliance requirements and more streamlined reporting. As indicated below, there are a few expenditures that are prohibited by the ARP/CSLFRF. Aside from these  include expenditures for operational, administrative, programmatic, and capital purposes.  standard allowance.  Coovrieht 02 20091 to Present Schoolo of Government: atth thel Universitvo ofNorthCarolina.    Mpmmuaomassawdww-waww -expendftures!  prohibited expenditures, al local government is generally free to spend its ARP/CSLFRF funds as it would its other This blog post details eligible expenditures and compliance requirements for revenue replacement. It highlights recent changes by US Treasury (as ofJuly 2022) to further reduce the compliance burden in this category. It then providesa a specific roadmap to making revenue replacement expenditures, along with a downloadable checklist. (Many of you  unrestricted revenue sources.  will want to skip directly to that section.) Revenue Replacement Expenditures Allowable Expenditures  Revenue replacement ARP/CSLFRF funds may be spent on the provision ofgovernment services. US Treasury does not  define "government services," but provides several non-exclusive examples:  In! USTreasury's) Final Rule Supplement, government services include: maintenance or pay-go funded building ofinfrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision In USTreasury's) Final Rule Overview, it states: "Iglovernment services generally, include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive: Construction of schools and hospitals; Road building and maintenance, and otheri infrastructure; Health services; General government administration, staff, and administrative facilities; Environmental remediation; [and] Provision of police, fire, and other public safety services (including purchase of And in USTreasury's FAQs on the Final Rule, the answer to Q3.2 states: "Treasury is clarifying here that under the final rule, payroll for government employees, contracts, grants, supplies and equipment, rent, and the many other costs that governments typically bear toj provide services are costs that could comprise the costs of  of police, fire, and other public safety services."  fire trucks and police vehicles)."..  government services, and are eligible uses of funds."  As these examples attest, the authority to expend ARP/CSLFRF funds in the revenue replacement category is very broad. It encompasses almost anything a local government has state law authority to undertake, including general fund and enterprise fund expenditures, operating and capital expenditures, administrative costs, salaries and benefits, and other internal costs, and external contracts for projects and services. And the ARP/CSLFRF allows a local government to reimburse itself for eligible expenditures incurred all the way back to March 3, 2021.  Prohibited Expenditures  There are certain prohibited expenditures, though. ARP/CSLFRF funds, even revenue replaçement ARP/CSLFRF funds, MAY NOT be spent on (1) extra pension fund contributions; (2) borrowing costs or debt service (loan) payments; (3) financial reserves/rainy day fund contributions; (4) litigation costs, including settlements. /judgements/c consent decrees;  Copvricht 02 2009t top Presents Schoold ofGovemment: att theU Universitvo ofNorthCarolhna.    mmugmsasnuaeawh.aA as-waoromstNarww-wwww  (5)e expenditures that undermine or discourage compliance with Centers for Disease Control (CDC). guidelines; (6) expenditures that violate federal conflict ofinterest provisions; and (7) expenditures that violate state law or other federal  laws and regulations, including applicable Uniform Guidance requirements. Revenue Replacement Compliance Requirements  Although the compliance and reporting mandates for reyenue replacement are more streamlined than those that apply to the other ARP/CSLFRF categories, there are still some federal substantive and process requirements (in addition to applicable state law requirements). Specifically, a local government must comply with the. ARP/CSLFRF Award Terms  and Conditions, specified Uniform Guidance provisions, and any applicable state law provisions.  Award Terms and Conditions  All ARP/CSLFRF expenditures, including reyenue replacement expenditures, are subject to the grant award terms and  conditions. They are detailed here. The major provisions are summarized as follows:  Eligible Use. A local government may only use. ARP/CSLFRF funds for an eligible use, as defined by the ARP/CSLFRF Final Rule. As detailed above, an eligible use in the revenue. replacement category is any expenditure a local government has state law authority to make, except as, specifically, prohibited by the  ARP/CSLFRE Final. Rule (see prohibited expenditures above).  Period of] Performance. A local government: may only use. ARP/CSLFRF funds for eligible costs incurred from March 3, 2021 through December 31, 2024. And all ARP/CSLFRE monies must be expended by December 31, 2026. A cost is incurred when it is legally obligated and expended when the amount is due for payment. Reimbursement expenditures are allowed as long as the cost was incurred for an eligible project on after March 3, Reporting. A local government must comply with reporting obligations established by US Treasury for the Maintenance of and Access to Records.. A local government must maintain records and financial documents sufficient to evidence compliance with the. ARPICSLFRF and all applicable regulations. The US Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, have the right of access to records (electronic and otherwise) to conduct audits or other investigations. All ARP/CSLFRF records must be maintained for aj period of five (5) years after all funds have been expended or returned to US Treasury, Conflicts ofl Interest. A local government must maintain a contlict-of-interest policy consistent with 2 C.F.R. $ 200.318(c). The local government must disclose in writing to US Treasury any potential conflict ofinterest Compliance with Applicable Laws and Regulations.. A local government must comply with the requirements of ARP/CSLFRE, regulations adopted by US Treasury pursuant to the. ARP/CSLFRE, and other applicable guidance issued by US Treasury. It also must comply with all other applicable federal statutes, regulations, and executive  2021.  ARP/CSLFRE. The reporting requirements are detailed here.  whichever is later.  affecting the awarded funds in accordance with 2 C.F.R. $ 200.112.  Copvrieht 02 2000t tor Presents SéhoolofGovernment: att theu Universilv ofNorthCarolina.    PgeougaaNMAw-sawwwrwmaN,  orders. Federal regulations applicable to this award include, without limitation, the following:  Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart. F -Audit Requirements ofthe Uniform Guidance, implementing the Single Audit Act, shall apply to this award.. As detailed below, US Treasury has exempted revenue Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to2 C.F.R. Part 25 is hereby incorporated by Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20.  replacement expenditures from some ofthese requirements.  reference.  New Restrictions on Lobbying, 31 C.F.R. Part 21. 4655) and implementing regulations.  Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. 88 4601-  Generally appliçable federal environmental laws and regulations.  Civil Rights Compliance. A local government must assure compliance with federal civil rights laws. Hatch Act. A local government must comply, as applicable, with requirements of the Hatch Act (5 U.S.C. 88 1501- 1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or inj part byt this federal assistance. Protections for Whistleblowers. A local government must provide whistleblower protections related to the grant in  accordance with 41 U.S.C. 8 4712, Uniform Guidance Provisions  As part oft the ARP/CSLFRF Award Terms and Conditions, a recipient local government must follow the federal Uniform Guidance in implementing the grant. The Uniform Guidance, 2 CFR 200, is a set ofi federal regulations that apply to federal awards. The Assistance Listing: Coronavirus State and Local Fiscal Recovery Funds specifies the Uniform Guidance (UG) provisions that apply to the ARP/CSLFRF. However, as ofJuly 27, 2022, US Treasury has exempted revenue replacement expenditures from some oft the most challenging oft these requirements. Al local government must only follow the specific UG regulations identified in Einal Rule FAQ1 13.15 for revenue replacement expenditures.  They are:  Copvricht 9: 20091 toP moibaleommasiewuasiamGmiN    mmupeatapsAwitamegiw dl-2p1-new-ewer-comlmce-rgitiment-bramense-rPlxenenl-eapemaitures,  Subpart A, Acronyms and Definitions Subpart B, Generalprovisions. 200.204, .205, .210, and .213)  Subpart C, Pre-Federal Award Requirements and Contents ofFederal Awards (except 2 CFR Subpart D, Post Federal; Award Requirements.But only the provisions listed below)  300 Statutory and national policy requirements. 200.302 Financial management. 4 200.303 Internal controls. 2 200.328 Financial reporting.  200.329 Monitoring and reporting program performance. h Record Retention and Access (2 C.F.R. 200.334 - 200.338)  334 Retention requirements for records. 335 Requests for transfer ofrecords. 337 Access to records. 338 Restrictions on public access to records. 339 Remedies for noncompliance. 340 Termination. 341 Notification oftermination requirement. 342 Opportunities to object, hearings, and appeals. 343 Effects of suspension and termination. 200.346 Collection ofa amounts due.  336 Methods for collection, transmission, and storage ofinformation,  200.344 Closeout.  200.345 Post-closeout adjustments and continuing responsibilities.  Subpart E,Cost Principles (But only 200.400(a)-(c) and (e); 200.403(a), (c), (d), (g), and (h); Subpart EAudit Requirements (Unless eligible for alternative compliance engagement) As aj practical matter this means that revenue replacement expenditures are. NOT subject to federal procurement and contracting requirements, program income, property management, subawards, and Federal Funding Accountability and Transparency Act (FFATA) reporting. And revenue replacement expenditures are subject to a more. limited allowable cost/cost principles review. Although it appears that al local government is still subject to many UG provisions, the good  200.404(e))  2CFR Part 25 (Universal Identifier & System for Award Management)  news is that they are relatively straighttorward to implement.  State Law Provisions  A local government must also follow any state law provisions applicable to specific projects. For example, ifrevenue replacement funds are used for a construction project, state law bidding and contracting laws apply, even though federal  provisions do not.  Roadmap for Revenue Replacement Expenditures  Putting this all together, the following provides a step-by-step guide to making ARP/CSLFRF revenue replacement STEP 1: ESTABLISH FINANCIAL MANAGEMENT SYSTEM AND ADOPT WRITTEN INTERNAL  expenditures. (And here is a. pdf version to download for your convenience.)  CONTROLS  Before making any specific revenue replacement expenditures, al local government must establish its general compliance  framework. That includes the following: Copvright 02 2009toP Present Schoolo of Government: att theU Universitvofr Northo Carolina.    https/eanons.sog.um  9ameriean-tscur-pan oa-feraumglae -requirements- ipd  Set up basic financial administration. A local government must have a financial management system that is sufficient to allow it to complete all necessary reporting requirements related to the. ARP/CSLFRF award. It does not have to be a sophisticated system. For many local governments a simple spreadsheet will suffice. Ata minimum, a local government must track obligations and expenditures of ARP/CSLFRF funds by project and include real-time comparisons tol budgeted amounts for those projects. Ifa local government's current financial management system does not allow for this level of tracking, staff may use one oft these Excel Tracking Templates Adopt and implement written internal controls. Additionally, al local government must adopt and implement a written set ofinternal controls related to its financial transactions. The: nature oft these controls will vary based on the size oft the unit and its staffing capacity, but there are some minimum requirements. A local government should generally conform its internal controls to those that apply to federal agencies through what is known as the federal "Green Book" or the COSO framework. That does not mean that a local government must adopt all the specific controls that apply to federal agencies; rather, it should simply follow the same general framework for its own controls. The controls fall within five main categories. A local government's written internal controls identify  (Template 1 and Template2).  peilicatiom-pecdures within each oft these categories. The five categories are:  1. Control Environment. Include provisions related to the role oft the board in setting the tone for full compliance by all local government employees and officials and the board's commitment to integrity and ethics. Also include provisions related to how the board enforces accountability- periodic reporting, internal audits, audit committees, 2. Risk. Assessments. Include provisions about how the local government identifies and analyzes risk of fraud, mistake, or other misappropriation. Who, performs this function? What is involved in risk assessments? How are they documented? How often are risk 3. Control Activities. Include provisions about activitiès that address potential risks. This section should include the specific controls that the local government has adopted, such as segregating duties for financial transactions, processes and oversight related to cash drawers, processes for receiving and reconciling revenues, rotating duties for financial transactions, controls over access to technology, cash management, deposits, and disbursement controls, etc. It should specify who performs what duties and who is 4. Communication/Tralning, Include provisions related to how personnel are informed and trained on appropriate controls and how any changes are communicated. 5. Monitoring Activities. Include provisions related to how the local government will monitor all financial activities to ensure proper compliance with controls and to ensure controls are effective. Who performs this function? How is it documented? This section should also detail what happens when deficiencies are detected and identify specific  consequences for: noncompliance, etc.  assessments performed? What changes impact risk?  responsible for supervsion/oversigat.  consequences for noncompliance.  The North Carolina Department of State Treasurer has a helpfulguide on specific internal control considerations  and processes for smaller units.  STEP 2: ADOPT AND IMPLEMENT GENERAL COMPLIANCE POLICIES  Copvright 02 2009t tol Presents Schoold ofGoyemment: att theu UnisemalivofertlhGanalin:    Paw -rescue- plan- act-of-2021-new-H fewer-compllance-r requirements- -for- morghRtepes  Al local government must adopt and implement the following policies for all ARP/CSLFRF expenditures, including those in the revenue replacement category. Ib have included links to sample policies for each that a local government may use as  templates.  Records Retention. This policy supplements a local government's regular records retention policy to establish procedures to retain all ARP/CSLFRP-related information for at least 5 years after all grant funds are expended or Eligible Use. Thisi is a simple policy that indicates allowable and unallowable projects, based on the expenditure categories in the. ARP/CSLFRF Final Rule. Iti requires al local government to identify stafft to document and review ARP/CSLFRF expenditures. That documentation must be retained according to the record. retention requirements. Allowable Cost. This is policy requires al local government to perform a general review of each cost item to ensure iti isa allocable, reasonable, consistently treated, and properly documented. Samplepolsyhere). As noted above, the specific cost item regulations in the UG do not apply to revenue replacement expenditures. That section of Civil Rights Compliance. This policy reaffirms the local government's commitment to compliance with federal civil rights laws and establishes processes for reporting potential violations and tracking complaints and resolutions. Conflict ofInterest. Thel UG requires recipients and subrecipients of federal financial assistance to maintain written standards of conduct covering conflicts ofi interest and governing the actions ofi its employees engaged in  returned to US Treasury. (Samplepolikyhere)  Samplepolisyhere)  the allowable cost policy will not be triggered, for expenditures in this category.  Samplepolicy.here)  the selection, award, and administration of contracts. (Samplep policy here.)  STEP 3: IDENTIFY ELIGIBLE PROJECT  A local government may use revenue replacement ARP/CSLFRF for any purpose authorized by state law, except for the specific prohibited items listed above. Examples include paying salaries and benefits of local government employees, contracting with other local governments or nonprofits toj provide community programs or services, purchasing real property, supplies, and equipment, and contracting for design, construction, repair, or renovation work. A local government should identify the purpose, scope, and estimated cost oft the project. It then must identify state law authority and any state lawj process requirements. Finally, it must ensure the project is not on the prohibited list (detailed above). Recall that ARP/CSLFRF funds also may be used to reimburse al local government for a prior eligible project, as long as  the costs were incurred on or after March 3, 2021.  STEP 4: DOCUMENT COMPLIANCE WITH REQUIRED POLICIES  The implementation oft the UG policies related to ai revenue replacement project/expenditure is straightforward. A local  government must do the following:  Document eligibility determination and basic allowable cost review, according to procedures in these two policies: eligible use policy and allowable cost policy. This can be accomplished with this Eligibilityand Allowable Cost) Documentation Template or through a similar document created by the local government.  Copvrieht 02 2009 tol Present Schoolo of Government: att theu Universitvo of NorthCarolina.    htps/eumonsogamcale, /og/american- saeghan-saalama-ao-erionr-ompalane TP-eRN-F-CNEgost-egendnre,  Determine and address any conflicts ofinterest, according to the local government's confictofinterest policy_thati tincorporates both state and federal requirements. Note that internal expenditures on salaries and benefits will not trigger conflict ofi interest issues, but external agreements funded with revenue replacement funds  might.  STEP 5: FOLLOW STATE LAW BUDGETING  ARP/CSLFRF funds must be properly budgeted before they can be obligated and expended. See G.S. 159-8. Irecommend budgeting ARP/CSLFRF funds in a grant project ordinance, pursuant to G.S. 159-13.2. Here is a budget template and this blog.post details different budgeting and accounting options for different types ofi revenue replacement expenditures.  STEP 6: ENTER INTO OBLIGATIONS AND MAKE DISBURSEMENTS  A local government must follow state law processes toi incur obligations and make disbursements, An obligation happens when a local government: makes al legal commitment to pay money to another. Examples include issuing POs to vendors, using a credit card or p-card toj purchase goods or services, and executing a contract for services or construction. Before incurring an obligation, a local government must follow the preaudit process. See G.S. 159-28. Once the goods are delivered or services are performed, an expenditure occurs, and a local government performs a disbursement process before paying the invoice or bill. Id. As part of that disbursement process, finance staffmust ensure that there is proper documentation of performance by the other party to the agreement and that the amounts requested are due and owing.  STEP 7: COMPLETE REQUIRED US TREASURY REPORTS  The ARP/CSLFRF requires a local government to complete periodic réports to US Treasury. Most local governments must complete a yearly Project and Expenditure Report, Some will complete this report quarterly and a few (the largest local governments) also will complete a yearly Recovery Plan Performance Report. A schedule of reporting requirements and deadlines is here. For local governments that expend all their ARP/CSLFRF funds in the revenue replacement category, completing the Project and Expenditure Report is easy. All revenue replacement expenditures may be reported STEP 8: RETAIN DOCUMENTATION ACCORDING TO ARP/CSLFRE-SPECFIC RETENTION POLICY A local government must retain all policies, budgets, contracts, documentation, and other records justifying its ARP/CSLERF expenditures according to its ARP/CSLERE-specitic record retention policy. (Reminder that all documentation must bei retained for atl least five years after all grant funds are expended or returned to US Treasury.) For example, ifal local government expends its revenue replacement funds on salaries and benefits, it must retain general financial records tracking the obligations and disbursements, payroll records, the grant project ordinance appropriation(s) and any amendments, special revenue fund reçords and any. journal entries, the eligibility determination documentation, and the allowable cost review documentation for the required retention period. (Sample documentation form for both  as a single project with al briefnarrative to outline the specifics.  eligibility determination and allowable cost review here.)  STEP 9: PREPARE FOR AUDIT Coovrieht 02 2009t to Presents Schoolo ofGovernmenta att thel Universitvo ofN NorthCarolina,    htps.Canonssogune.  MmssunsegimadsPlwwwr,  All local governments are subject to a yearly independent financial audit, pursuant to G.S. 159-34. Expenditure of federal funds, though, may trigger greater audit scrutiny. As detailed in Rebecca Badgett's] post, ifal local government expends $100,000 or more in combined state and federal funds in any fiscal year, it also triggers a Yellow Book audit. And ifa local government expends $750,000 or more of federal funds in any fiscal year, it also triggers a federal Single Audit, unless the local government qualifies for the alternativé çompliance engagement that applies to the. ARP/CSLFRF program. Ifal local government triggers the Single Audit; it must follow UG procurement requirements (as detailed in Rebecca's post) to select and contract with its auditor. These requirements still apply even ifa all expenditures are from Revenue Replacement ARP/CSLFRF funds and even ift the audit contract is paid for with Revenue Replacement funds or  non-grant revenue sources.  Allr rights reserved. This blog posti is published: and posted onlinel by the School of Government to address issues ofi interest tog government officials. Thisl blog posti is fore educational andi informational use: andr mayb ber used for those purposes without permission by providinga acknowledgment of its source, Use of this blog post for commercial purposes is prohibited. Tol browse ac complete catalog of School of Government; publications, please visitt the School's website: at www.sog.uncedu or contact the Bookstore, School of Government, CB# 33301 knapp-Sanders. Building, UNCO Chapel Hill, Chapel Hill, NC2759-330,e-mal.  sales@sogunc.edu; telephone 919.966.4119;ori fax 919.962.2707.  Copvrieht 02 2009t toE Prescnt Schoolo of Government: att theUniversitvofr ENorthCarolina.    Revenue Replacement  Ak local government may expend Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) on a board range of general government services under the Revenue Replacement allowable use category. There are two ways to proceed under this category: a unit may either elect to take the $10 million Standard Allowance or it may calculate The Standard Allowance allows a local govemment to expend up to $10 million ofi its CSLFRF funds in the Revenue Replacement category without having to demonstrate any actual lost revenue. US Treasury has stated that a local government must elect either the Standard Allowance or the Formula Approach for Revenue Replacement in the April 30, 2022 Project and Expenditure Report. This is a one-time election that cannot be changed. Importantly, by electing the standard allowance and spending CSLFRF funds as revenue replacement does not convert CSLFRF funds into general revenue funds. The CSLFRF funds remain grant funds and must be expended May a local government elect the Standard Allowance ifi it did not experience any revenue loss? Yes; there is no requirement to prove a loss in revenue. Treasury will presume that each jurisdiction experienced up to $10 million in lost revenue. If al local government received less than $10 million in CSLFRF funds, itr may take the Standard Allowance for the full amount it received. For example, ifa a local government received $1.2 million, Ifal local government elects the Standard Allowance does it have to spend all of its CSLFRF funds in the Revenue Replacement category? No. Electing the Standard Allowance just indicates the maximum amount a local government may spend in the Revenue Replacement category, but it does not require al local government Are CSLFRF funds expended under the Revenue Replacement category subject to the Uniform Guidance? Likely, yes. As of 4/5/2022, Treasury has not exempted funds expended for general government services under the Revenue Replacement category from the Uniform Guidance. The safest bet is to assume the What are the benefits of expending CSLFRF on general government services in the Revenue Replacement category?. A general government service includes any service traditionally provided by government that a local government has state law authority to engage in, including public enterprise activities. Spending funds ini the Revenue Replacement category allows a local government to undertake a wide array of potential expenditures, including within this covering the salaries and fringe benefits of local government employees; park improvement projects; purchasing equipment and supplies for local government operations; renovating public buildings and facilities; and many more. U.S. Treasury has also provided al list of general government services that a local government may presume are eligible uses of CSLFRF funds, including:  actual revenue loss according to U.S. Treasury's formula outlined in the Final Rule.  inc compliance with the the grant award terms and conditions.  it may expend up to $1.2 million as revenue replacement.  to spend all, or even any, of its CSLFRF funds in the Revenue Replacement category.  Uniform Guidance applies until Treasure says otherwise.  maintenance or pay-go funding building of infrastructure, including roads; health services; environmental remediation; school or educational services; and purchasing other equipment, covering salaries of public safety personnel).  modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; the provision of police, fire, and other public safety services (e.g., purchasing a fire truck or police vehicles, Ist there a strategic way to expend CSLFRF funds (i.e., how do we make the best use of funds and trigger the fewest compliance requirements)? A local government may choose to allocate CSLFRF funds to those projects and expenditures that will trigger the fewest Uniform Guidance compliance requirements, thereby limiting the administrative burden. For example, instead of purchasing new police vehicles, which would trigger    UG procurement and property management standards, a local government may opt to fund personnel salaries. In doing sO, the unit will have freed up general fund revenue that would have otherwise been used to pay for salaries. This additional general fund revenue could then be expended on the purchase new police vehicles, May CSLFRF funds be spent to cover employee salaries and fringe benefits? 2 C.F.R. 200.430 & .431 authorize a local government to spend Federal grant funds to cover employee salaries and fringe benefits when certain conditions are met. Specifically, salary expenditures must be reasonable and fringe benefits are allowable only if a specific covered benefit is required by law or provided as part of an established policy. Allowable fringe benefits may include: covering leave during authorized absences (annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave); employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance; individual retirement account contributions, and similar benefits. Although the Uniform Guidance allows pension plan contributions, the terms and conditions of the ARP Awanlxpressi.pohbt. lump sum deposits into pension May Revenue Replacement CSLFRF funds be expended on capital improvement projects? Yes, CSLFRF may be spent on capital improvement projects under the Revenue Replacement category, and no preapproval from Treasury is necessary to engage in a capital improvement project. Additionally, unlike capital expenditures within the Address COVID Public Health & Negative Economic Impact category, there is no requirement to provide written justification for capital improvement projects costing more than $1 million. May a unit combine CSLFRF with other revenue sources to fund a project? Yes. Treasury allows the "blending and braiding" of funds to complete eligible projects. Recipients may undertake projects ont their own using various revenue sources, pool funds with other recipients, or contract with a subrecipient to complete eligible projects. Importantly, CLFRF may not be used to fund debt services or cover borrowing costs. When completing a capital project, CLFRF can fund the cash portion of the project (the "pay-go" portion), but other May CSLFRF funds available under the Revenue Loss category be used to meet the non-federal match or cost-share required of other federal programs? Yes, funds under the Revenue Loss category generally may be used to meet the non-federal cost-share or matching requirements of other federal programs. CSLFRF funds may not be used as the nonfederal share for purposes of a state's Medicaid and CHIP programs. CSLFRF funds in the other eligible use categories may not be used to meet the non-federal match or cost-share  which would only trigger state law procurement and property disposal requirements.  funds. Contributions to individual employee retirement accounts are allowable.  revenue sources must fund any debt or borrowing costs.  requirements of other federal programs, unbesspedftaly-poxied for bystatute.    North Carolina  Procurement  Manual  NC*DOA Department of Administration Purchase & Contract  2022    Introduction  The North Carolina Department of Administration (NCDOA): serves as the business manager fort the state of North Carolina. Int this capacity, NCDOA oversees government operations such as building construction, procurement of non-IT goods and services, management of state vehicles, acquisition and disposal ofr real property, and operation services such as courier mail delivery and the sale of surplus property. Additionally, NCDOA oversees many oft the state's advocacy programs, which advocate for and serve diverse segments of the state's population that have been traditionally underserved. NCDOA's mission provides three imperatives that guide the department:  1) Explore new and improved ways to deliver effective and efficient services to create  value for taxpayers. 2) Provide superior customer service. inclusiveness.  3) Create a culture oft trust through enhanced employee engagement, openness, and Located within NCDOA is the Division of Procurement & Contract (P&C), the state's central procurement authority. P&C oversees procurement for all state departments, institutions, agencies, universities, and community colleges. Ins support of NCDOA's mission, P&Cis responsible for leading, implementing, and administering the strategy, policy, and practices for the procurement of non-IT goods and services associated with the state's operations. Procurement int the state of North Carolina is governed by the North Carolina General Statutes (statutes), North Carolina Administrative Codes (rules), and various policies and procedures which govern the state's procurement practices. While P&Ci is the central procurement authority for non-IT goods and services, there are two other defined procurement entities for the state. The Department ofl Information Technology (DIT), Statewide Information Technology Procurement Office (SITP) serves as the authority over the procurement ofa all IT goods and services. Similarly, the NCDOA, State Construction Office (SCO): serves as the authority for procurement of all state construction projects.  P&C Mission and Vision services for the state of North Carolina.  The mission of P&C is to provide for the effective and economical acquisition of goods and The vision of P&Cis to be a trusted partner that delivers outstanding customer service, fosters collaborative relationships, and adds value through strategic actions, efficient processes, and innovative technology to be recognized as a world-class procurement As such, P&C is committed to being accountable for developing and maintaining competencies, to include knowledge, skills, and abilities, which establishes P&C as the center of excellence for subject matter experts in North Carolina procurement processes and practices. This commitment involves transitioning from traditional public procurement practices to the development and adoption of more innovative processes that promote  operation.  Page 1  NC*DOA    sound fiscal decision-making and encourage competition; thus ensuring that the public To achieve such an endeavor, P&Ci is organized into five sections that are closely integrated, 1) Procurement Education - Provides training on procurement policy, methods, strategies, and skillsets to procurement professionals across the state 2) Strategic Sourcing - Performs the procurement function on behalf of P&C by assisting agencies with procurements that exceed their general delegations and managing 3) Contract Management (Legal) As the in-house legal department for P&C, assists procurement professionals with legal issues related to procurement, including 4) Compliance Reviews agency activities to ensure compliance with procurement 5) Systems Support Provides support for all related procurement systems and  good has been served. to include:  Statewide Term Contracts (STCs)  contract interpretation and negotiation policies, laws, and practices technologies for each above area Each oft the sections supports P&Ci in:  Creation and management of procurement policies Providing guidance on procurement strategies  Determination of appropriate procurement methods and strategies Ensuring compliance with the tenets of fair and open competition, with respect to Support the utilization and participation of Historically Underutilized Businesses  ethical and transparent procurement  (HUB)  Facilitation oft the solicitation process through contract award Creation and maintenance of procurement file best practices  Administration ofa all STCs, including vendor performance, modifications, renewals,  cancellations, and disputes Management of vendor relationships  Statutory Authority  The procurement of non-IT goods and services in the state is governed by Chapter 143, Article 3 ofthe North Carolina General Statutes. State agencies, institutions, community colleges, and the universities of the UNC system must adhere toi these statutes. Entities that do not fall under this authority include public schools, charter schools, and local and county  governments, which fall under the authority of Chapter 143, Article 8.  Page 2  NC*DOA    An additional source ofa authority is the North Carolina Administrative Code. The procurement ofr non-IT goods and services is governed by Title 01 Chapter 05 oft the code,  with most provisions seti forth in Subchapters 05A and 05B. Contracting in Violation of the Law  Pursuant to G.S. 143-58, any contracts that are not procured in accordance with state procurement laws or rules shall be void and ofr no effect. In addition, the executive officeror the secretary of any agency shall be personally liable for the costs of any such contract. Therefore, iti is the responsibility ofe each agency involved to ensure that all procurementis carried outi in accordance with all applicable laws, policies, and procedures.  Integrity and Ethics  Integrity and ethics are central to public procurement. While laws and rules coalesce to provide a mechanism for public procurement, only people can ensure that integrity and ethics are the standard. In procurement, as in all fields, professionals must exhibit the values of pride and worth ini their conduct and performance. Impediments to these values must be detected early, and safeguards provided at all levels. This applies to both state personnel Ethics are the moral principles that govern behavior and conduct. Strong ethical principles are required for public procurement because they prevent breach oft the public trust by any attempt to realize personal gain through conduct inconsistent with discharge of duties. Therefore, iti is imperative that all state personnel be entirely cognizant oft the necessity for ethical behavior. It takes only the slightest hint ofi impropriety to cast doubt on the procurement process. To that end, G.S. 14-234 (a)(3)states, "No public officer or employee may solicit or receive any gift, reward or promise of reward in exchange for recommending, influencing, or attempting to influence the award ofa contract by the public agency he or G.S. 133-32 further prohibits the offert to, or acceptance by, any state employee of any gift from anyone with a contract with the state, or from any person seeking to do business with P&C takes pride in leading the efforts on integrity and ethics for procurement. These efforts are based on common ethical principles derived from professional codes of conduct provided by organizations such as the National Institute of Governmental Purchasing (NIGP), the Universal Public Procurement Certification Council (UPPCC), and the American  and the vendor community.  she serves." the state.  Bar Association (ABA).  Common ethical principles that P&C strives to perfectinclude:  Impartiality- Equal treatment ofa all suppliers/customers and objective evaluation of Honesty Truth in all dealings with everyone, including contractors and the public  each transaction and contract based on value and merit Loyalty - Faithfulness to the entity, free of conflicts ofi interest  Page 3  NC*DOA    North Carolina Procurement Manual  This procurement manual is based ont the above concepts and best business practices. The intent oft the manual is to support state entities in the administration oft their efficient and effective internal procurement programs. While the North Carolina Procurement Manual is a state-led policy and process manual, it is important to note that each state agency, institution, community college, and university should maintain an individual agency procurement manual to set forth the policies and procedures governing their delegated  authority for the procurement of goods and services.  Page 4  NC*DOA Administration    Contents Introduction  P&C Mission and' Vision. Statutory Authority. Contracting in Violation of the Law. Integrity and Ethics. North Carolina Procurement Manual  Section 1: Procurement Delegations and Thresholds.  11 11 11 12 13 14 14 14 15 15 16 16 17 17 18 18 18 18 19 19 20 20 21 21 22 Page 5  1.1 Delegations. 1.1.1 General Delegations. 1.1.3 Special Delegations. 1.1.4 Exemptions. 1.1.4.1 Statutory Exemptions. 1.1.4.2 Exemptions - 01 NCAC 05B.1601 1.1.4.3 Other Exemptions - NCAC 05B.1601(b). 1.1.4.4 Across the Counter Purchases 1.2 Procurement Thresholds 1.2.1 Small Purchases. 1.2.2 Informal Purchases. 1.2.3 Formal Purchases. 1.2.4 Determining Contract Value. 1.2.5 Contract Term 1.3 Identifying the Need (Goods and Services). 1.3.1 Goods.. 1.3.2 Service Contracts. 1.3.2.1 General Service Contracts 1.3.2.2 Professional Service Contracts. 1.3.2.3 Consultant Service Contracts. 1.3.2.3.1 Review of Agency Requests. 1.3.2.3.2 Contracting for Consultant Services 1.3.2.3.3 Negotiated Consultant Contracts  1.1.2 Increasing or Reducing the General Delegation..  NC*DOA Administratio    Section 2: Procurement Methods and Considerations  22 22 22 22 23 23 23 24 24 25 25 25 25 25 25 26 27 27 27 28 28 28 29 30 30 30 30 31 31 31 32 32 Page 6  2.1 Procurement Methods. 2.1.1 Procurement Expenditures. 2.1.1.1 Small Purchases 2.1.2 Procurement Card (P-Card).  Transaction limits for state. agencies and state departments. Transaction limits for other eligible entities.  2.1.3 Open Market Solicitations. 2.1.4 Statewide Term Contracts. 2.1.4.1 Mandatory versus Convenience Mandatory STCs. Convenience STCs. 2.1.4.2. Abnormal Quantity. 2.1.5. Agency Specific Term Contract. 2.1.6 Waiver of Competition. 2.1.6.1 Waiver of Competition Conditions. 2.1.7 Brand Specific Requests.. 2.1.8 Emergency Purchases 2.1.9 Pressing Need. 2.2 Grant Funded Contracts. 2.2.1 Conditional Grants.. 2.2.2 Federal Grants.. 2.3 Purchasing Preferences 2.3.1 Correction Enterprises 2.4 Other Considerations 2.4.2 Auctions 2.4.3 Reverse Auctions.. 2.4.4 Cooperative Purchasing. 3.1 Preparing the Written Solicitation  2.3.2 Nonprofit Work Centers for the Blind and Severly Disabled. 2.4.1 Use of Purchasing Power for Private Purposes..  Section 3: General Procurement Planning and Guidelines.  NC*DOA rtment ofAdminist    3.1.1 Terms and Conditions 3.1.3 Response Time. 3.1.4 Acceptance Period 3.1.5 Specifications.  32 32 33 33 34 34 34 34 35 35 35 35 36 36 37 37 37 37 38 38 39 40 40 41 41 41 41 42 42 42 43 45 Page 7  3.1.2 Pre-Bid/Pre-Proposal Conferences or Site Visits.  3.1.5.1 Generic (Performance and Design). 3.1.5.2 Brand Name or Functional Equivalent.  3.1.5.3 Brand Specific. 3.1.6 Contract Pricing Structures 3.1.6.1 Fixed Price Contracts 3.1.6.3Term Contracts 3.1.6.4Time and Materials (T&M).. 3.1.6.5 Blanket Purchase Orders 3.1.6.5 Cost Plus Percentage of Cost Contracts 3.1.7 Commodity Codes.. 3.1.8 Payment Terms. 3.1.9 Evaluation Criteria.  3.1.6.2 Fixed Price with Escalation or De-Escalation.  3.1.9.1 Lowest Cost Technically Acceptable Method. 3.1.9.2 Best Value Trade-Off Method 3.1.10Transportation/Freight. 3.1.11 Product Samples..  3.1.12 Vendor Presentations and Product Demonstrations.  3.2 North Carolina Procurement Initiatives 3.2.1 North Carolina Resident Vendors. 3.2.2 HUB Encouragement and Participation 3.3 Procurement Request Process. 3.4 Control Numbers.. 3.5 Spend Analysis  There are several benefits to performing spend analysis: Spend Analysis helps to answeri the following questions:  Section 4: Procurement of Goods and Services.  NC*DOA    4.1 Scope of Work and Specifications..  45 45 46 47 47 48 48 49 50 50 50 51 52 52 52 52 52 53 53 54 54 54 55 55 55 55 56 56 57 57 57 57 Page 8  4.2 Information Gathering Before Preparing a Solicitation 4.3 Determining the Appropriate Solicitation Document.. 4.4 Determining the Appropriate Solicitation Method. 4.4.1 Small Purchases $25,000 or Less. 4.4.2 Informal Purchases. 4.4.3 Formal Purchases. 4.4.4 Email, Fax, or Telephone Bids. 4.5 Preparation of Solicitation Document..  NOTE: Legal Review of Contracts Valued Over $1 Million  4.5.1 Reterences 4.6 Insurance Coverage. Section 5: Competitive Sealed Bidding. 5.1 Overview of Competitive Sealed Bidding. 5.2 Advertising Solicitations 5.3 Solicitation Addenda 5.4 Bid Opening..  5.4.1 Bid Opening Procedures 5.4.1.1 One-Step or Two-Step Opening. 5.4.2Withdrawn, Void, or Recalled Offers.  5.4.3 Late Offers... 5.4.4 Bid Tabulation 5.5 Legal Review Thresholds. 5.5.1 Contracts Exceeding $1 Million Section 6: Evaluations and Negotiations. 6.1 Determining Responsiveness 6.1.1 Signed Bid 6.2 Determining Responsibility. 6.3 Debarred Vendors 6.4 Contidentiality During Evaluation 6.5 Evaluation Methods and Criteria.  5.5.2 Non-Competed Contracts Exceeding $5 Million..  NC*DOA Administratio    6.5.1 Lowest Price Technically Acceptable.. 6.5.2.1 Example Evaluation Criteria. 6.5.2.2 Narrative Evaluation 6.5.2.3 Numerical Evaluation 6.6Two-Step Competitive Sealed Bidding  58 58 59 60 60 61 62 62 62 62 62 63 63 64 64 65 65 65 65 65 66 66 67 67 67 68 68 68 69 70 70 70 Page 9  6.5.2 Best Value  Step 1... Step 2.. 6.7 Posting Bid Tabulations. 6.8 Communications with Vendors.. 6.9Tie Bids. 6.10 Basis for Rejecting Offers 6.11 Negotiation 6.12 Negotiation Tips and Guidelines 6.13. Award Recommendation 6.14 Partial and Multiple Awards. 6.15 Notification of Award. Section 7: Post-Award. 7.1 Notices to Vendor  7.2 Release of Confidential Information After Award.. 7.3 Review of Services for Acceptance. 7.4 Review of Goods for Acceptance. 7.4.1 Inspection and Testing 7.4.2 Damaged Goods 7.4.3 Inaccurate Orders 7.4.4 Inaccurate Quantities. 7.4.5 Late Shipments. 7.5 Contract Closeout Checklist 7.6 Performance and Default. 7.7 Debarred Vendors 7.8 Contract Renewals and Extensions 7.8.1 Contract Renewals  NC*DOA rtment Administratio    7.8.2 Contract Extensions. Section 8: Procedures and Records. 8.1 Procurement File Maintenance. 8.2 Public Records and Contidentiality 8.3 Public Records Requests. 8.4 Redacted Information 8.5 Record Retention.. Section 9: Bid Protests 9.1 Bid Protests. 9.2 Bid Protest Procedures 9.2.1 Protest Process Under Delegation. 9.2.2 Protest Over Delegation.. 9.3 Bid Protest Meeting  70 71 71 71 72 73 73 73 73 74 74 75 75  Page 10  NC*DOA    Section 1: Procurement Delegations and Thresholds  1.1 Delegations  There are normally two types of delegations: general and special. The differences between these and the conditions under which they are delegated are explained elsewhere ini the Delegations provide dollar thresholds that govern any agency's authority to procure goods and services. Agencies have the authority to purchase goods and services valued less than the agency's general delegation without involvement from the Division of Purchase and Contract (P&C). Universities have similar authority for purchases valued less than the university's bid value benchmark. Any transaction that exceeds an entity's general delegation or benchmark must be reviewed and approved by P&C unless iti is otherwise exempted. Contracts valued less than the agency's general delegation shall be the purchasing agency's responsibility. 01 NCAC 05B .0301. Agencies shall develop internal policies for purchases that are valued less than the general delegation, which shall comply with state Each agency should designate one or more individuals to be responsible fort the procurement functions oft the agency. Iti is recommended that just one office have this responsibility, to ensure consistency and accountability for all expenditures. Agencies shall not divide requirements into more: than one procurement in order to keep the individual purchases under the general delegation amount, and thereby avoid certain rules Agencies must ensure that they do not exceed their general delegation in handling any type of purchase. This includes monthly and quarterly (scheduled buying) purchases and agency specific term contracts, which may be established for items acquired by an agency ona repetitive basis. The cumulative contract value, including the original contract period and any renewals and extensions, must be used to determine whether a procurement is within the Agencies should monitor purchases valued under their general delegation to guard against abuse oft the system and to ensure that the dollar value received is commensurate with the  manual.  law and the Administrative Code.  and processes, including P&C oversight. 01 NCAC05B. .0315.  agency's general delegation. dollar amount expended. 1.1.1 General Delegations  The State Purchasing Officer (SPO) is authorized by statute to set the general delegation for most: state agencies. G.S. 143-53.1 and-53(a)(2). Agency delegation information is set forth The maximum authorized general delegations and benchmarks for goods and services are  in 01 NCAC 05B. .0301. as follows:  Page 11  NC*DOA    Agencies (excluding universities) are eligible fora a maximum general delegation of Agency general delegations may be increased or decreased by the SPO, as Community college delegations are set by the State Board of Community Colleges, in consultation with the Department of Administration, and are capped at $100,000 as University benchmarks are as set byt the University Board of Governors and are The university bid value benchmark is established pursuant to G.S. 116-31.10.  $100,000.  discussed below.  provided in G.S. 115D-58.14. capped at $500,000.  Although the purchasing benchmarks for universities are set by the University Board of Governors, those purchases are otherwise governed by state law and the Administrative Code. To help eliminate confusion, the term used to describe the authority to make purchases under an agency's delegation or a university's benchmark may be referred to asa "general delegation." The terms 'benchmark" and "general delegation" are used Agencies shall not independently award purchases that exceed their general delegation, whether based on the original contract amount ori the contract amount as amended, Agencies shall use solicitation templates provided by P&C for purchases that exceed their general delegation. Solicitation documents shall include the state's standard terms and conditions and other consistent contract language issued by the SPO. Invitation for Bid (IFB), Request for Quote (RFQ), and Request for Proposals (RFP) templates provided by P&C shall be used unless the SPO grants permission to modify the solicitation document 1.1.2 Increasing or Reducing the General Delegation The SPO is authorized by statute to raise or lower an agency's general delegation after consideration ofi its overall capabilities, including staff resources, purchasing compliance reviews and risk assessment, established procurement plan and policies, Historically Underutilized Businesses (HUB) plan, bid protest history, and staff training and certifications P&Ci is authorized to conduct compliance reviews of an agency's procurement practices. Compliance reviews shall determine whether agencies are complying with North Carolina procurement laws and regulations and whether an agency's delegations should be adjusted. The SPO: shall also conduct a compliance review whenever an agency requests a delegation increase in orderi to evaluate whether the increase is appropriate. 01 NCAC 05B.1605.  interchangeably.  without approval from P&C.  language.  of the individual agency. G.S. 143-53(a)(2).  Page 12  NC*DOA ofAdministration    1.1.3 Special Delegations  Special delegations apply to categories of goods and services that are specifically exempted by the SPO from P&C oversight. By special delegation, the SPO may authorize an agency toi independently purchase specific commodities, printing, or contractual services without limitation as to the expenditure. By contrast, general delegations, discussed above, are dollar thresholds under which agencies may procure all oft their own goods and services For goods and services governed by a special delegation, purchasing agencies are authorized to make their own purchases, regardless of dollar amount, but competition shall be sought where available. This is normally confined to procurements for which P&C involvement serves no purpose or adds no value. Such circumstances include perishability, Special delegations shall be in writing and retained as a matter of record. 01 NCAC 05B.1603. Unless otherwise specified byt the SPO, special delegations are subject toi the a) All goods and services covered by Statewide Term Contracts (STCs) must be purchased in accordance with the instructions of each contract. b) Competition must be solicited, where available. If competition is not available, the reason(s) must be documented in the procurement file. Agencies are required toi issue their own solicitation documents. The solicitation document shall include one oft the solicitation templates provided by P&C, including the state's standard terms and conditions and any other consistent contract language issued by the SPO, unless prior approval from the SPO is granted to substitute  without P&C review.  transportation costs, local conditions, or local availability.  following conditions and limitations:  modified language.  d) All transactions shall be documented. the agency's executive officer (agency head).  e) Awarding of contracts pursuant to a special delegation shall be the responsibility of Any controversial matter arising from a special delegation must be brought to the g) All bid protests on awards that exceed an agency's general delegation must be h) Specific delegations may be subject to additional conditions as determined by the SPO. These conditions shall be submitted to the agency in writing. Allcontracts expected to exceed $1 million shall comply with the requirements of G.S. P&C shall periodically review all approved special delegations to ascertain the  attention of the SPO. handled by the SPO.  143-50.1.  continued suitability for delegation.  Page 13  NC*DOA    1.1.4 Exemptions  Ina addition to special delegations, certain agencies or classes of goods and services may be exempted from P&C involvement. A few notable categories ofe exemptions are discussed  below.  1.1.4.1 Statutory Exemptions  Various agencies and governmental entities may have specific statutory authority that exempts them from P&C procurement statutes and rules. These statutory exemptions may encompass all ofa an entity's procurement activities or only specific types of purchases.  1.1.4.2 Exemptions - 01 NCAC 05B.1601  Rule 01 NCAC 05B. 1601(a) provides a list of goods and services that are not required to be  purchased through P&C: a) Purchase of liquor  b) Perishable articles such as fresh meats  However, 01 NCAC05B.1601C) provides that contracts for bakery products and dairy products shall be awarded through P&C ift the purchase exceeds an  agency's general delegation.  Published books, manuscripts, subscriptions to printed material, packaged d) Services provided by individuals by direct employment contracts with the state  copyrighted software products, and like materials e) Public utility services (gas, water, and electricity) f) Telephone and cable services furnished by those companies  g) Services provided which are subject to published tariff rates as established by the N.C. h) Services which are merely incidental to the purchase of supplies, materials, or Contracts for construction of and structural changes to public! buildings Personal services provided by a professional individual on at temporary or occasional basis using their professional skills to perform aj professional task. This includes consultants, doctors, dentists, attorneys, architects, engineers, scientists, performers  Utilities Commission  equipment such as installation services  oft the fine arts, and similar professions.  NOTE: Although this language remains in the rule, G.S. 143-48.6 requires that these contracts be handled the same as other service contracts. This  exemption is no longer valid.  k) Services provided directly by an agency oft the state, federal or local government, or its employees, when performing the service as a part of its normal governmental  function  Page 14  NC*DOA Administra    1.1.4.3 Other Exemptions NCAC05B.1601b)  In addition to products and services exempted by statute, NCACO 05B.1601(b) provides that the SPO may exempt other products and services from purchase through P&C provided that 6) Competition will not enhance the price that the state would receive for the product or 7) Competition will not enhance the quality of the product or service that the state would Currently, the following items are exempted from P&C pursuant to 01 NCACO5B.1601b): Repairs Non-Construction): Using agencies are authorized to purchase minor repairs NOTE: Structural changes made to ori in agency buildings shall be handled by the State Construction Office in accordance with the construction statutes and rules applicable to each agency. P&C does not handle these contracts unless Animals, Poultry, and Fish: Using agencies are authorized to purchase animals, Feed: Using agencies are authorized to purchase feed, including special ingredients Athletic Apparel: Using agencies are authorized to purchase athletic apparel. Safety concerns for the athletes should remain within the using agency and its subject matter Aircraft Maintenance: Using agencies are authorized to purchase aircraft maintenance and repair (see Repairs Non-Construction) whether unexpected or scheduled. This does not include the purchase of equipment, materials, or supplies for the aircraft that are separate and apart from the maintenance or repair being performed. Playground Equipment (Structures): Using agencies are authorized to purchase and install playground equipment when handled as a goods purchase versus a Ready-Mix Concrete: Using agencies are authorized to purchase ready-mix concrete  the SPO finds both conditions below true:  service. receive.  from the private sector, regardless of cost.  otherwise specified.  poultry, and fish.  fora animals, poultry, and fish.  experts.  construction project.  fora a good, not a construction project. 1.1.4.4 Across the Counter Purchases  The purchase ofi items for"across the counter" resale by an agency is not handled through P&C. 01 NCAC 05B.1508. However, such purchases, even if channeled through bookstores ord other internal supply sources including stockrooms and warehouses, are to be made in  accordance with state procurement rules, including: 1) Using State Term Contracts (STCs)  Page 15  NC*DOA rtment    2) Seeking competition (ifr not purchased from an STC) when thes solicitation is expected to exceed $25,000, including utilizing the P&C solicitation documents and the state's 3) Advertising the solicitation on the P&C's electronic bid system when the solicitation exceeds the general delegation or bid value benchmark 4) Waiver of competition documentation, ifcompetition is not sought  standard terms and conditions  1.2 Procurement Thresholds There are three procurement thresholds:  small purchase informal formal  The differences between these and the conditions under which they control are explained herein. The categories provide dollar thresholds that govern agency procurement authority  and the methods required to procure goods and services.  1.2.1 Small Purchases subject to the following rules:  Small purchases are those that are valued at $25,000 orl less, including the amount of any extensions or renewals. Small purchases are addressed in 01 NCAC 05B .0301 and are  STCs shall be used for small purchases if applicable and mandatory. STCs that are deemed for use as "convenience" may be used for any purchase, including small purchases. All goods and services covered by STCS shall be purchased in  accordance with the instructions in those contracts.  The P&C contract administrator for the STC: should be consulted by the using agency when a special type of good or service not already included ont the Agencies may post small purchase solicitations on P&C'se electronic bid system and may use solicitation templates provided by P&C. Agencies may also use NC eProcurement's: collaborative requisitioning function in order to seek vendor quotes. Agencies should monitor small purchases to protect against system abuse and to ensure that the value received by the agency is commensurate with the amount Agencies should follow their internal policies for small purchases, which may include soliciting at least three competitive quotes or bids. Additionally, agencies should develop initiatives to encourage and promote the use of HUB vendors. Agency executive officers shall develop written procedures for the administration ofs small purchases. Agencies shall provide  STC is needed.  Neither of these systems is required for small purchases.  spent.  these procedures to the SPO upon request.  Page 16  NC*DOA    1.2.2 Informal Purchases  Informal purchases are those that are valued between the small purchase benchmark of $25,000 and the agency's general delegation or university's bid value benchmark, including the amount of any extensions or renewals. Informal purchases are addressed in 01 NCAC  05B .0301 and are subject to the following rules:  STCs shall be used for informal purchases ifa applicable and "mandatory." STCs that are deemed for use as "convenience" may be used for any purchase, including informal purchases. All goods and services covered by STCs shall be purchased in  accordance with the instructions in those contracts.  The P&C contract administrator for the STC: should be consulted by the using agencywhen a special type of good or service not already included on the Informal purchases must contain the state's standard terms and conditions. To accomplish this, agencies have several options to pursue solicitation requests to  STC is needed.  vendors:  Utilize the NC eProcurement system to post informal purchase solicitations. Utilize the NC eProcurement system's collaborative requisitioning function. Issue a Request for Quote (RFQ) directly to at least three vendors.  Solicitations resulting in award of a contract shall be reviewed, approved, and executed by Agencies shall solicit at least three competitive quotes or bids. Additionally, agencies should develop initiatives to encourage and promote the use of HUB vendors. Agency executive officers shall develop written procedures for the administration ofi informal purchases. Agencies shall provide these procedures to the SPO upon request.  the approving agency, as documented in their procurement policy.  1.2.3 Formal Purchases  Formal purchases are those that are valued above the agency's general delegation, including the amount of any renewals or extensions. Formal purchases are addressed in 01 STCs shall be used for formal purchases, ifa applicable and 'mandatory." STCs that are deemed for use as "convenience" may be used for any purchase, including formal purchases.. All goods and services covered by STCs shall be purchased in P&C contract administrator fori the STC should be consulted by the using agency when a special type of good or service not already included ont the Procurements that exceed an agency's general delegation are required to have P&C review and approval prior to posting and prior to awarding the contract. Solicitations that require reviews and approvals will be processed through NC eProcurement or through the Procurement Information Portal (PIP) for  NCAC 05B .0301 and are subject tot the following rules:  accordance with the instructions ini those contracts.  STCi is needed.  Page 17  NC*DOA wOMtmemsTAdMEALaNeN    waivers of competition and non-users of NC eProcurement. Formal purchases must contain the state's terms and conditions. To accomplish this, agencies have limited options to advertise solicitations to vendors: NC eProcurement System, Ariba Sourcing Module - Post formal purchase solicitations on the NC eProcurement sourcing system using an IFB or RFP Interactive Purchasing System (IPS) - Post formal solicitations int the IPS using an IFB or RFP. This option is only available for non-Ariba Sourcing users. Request for Quote (RFQ) - Issue an RFQ document directlyt to one or more vendors. This option is only available for approved Waivers of Competition.  state document.  Solicitations resulting in award of a contract shall be reviewed and approved by P&C prior tot the agency or university executing the contract. Agencies should develop initiatives to  encourage and promote the use of HUB vendors. 1.2.4 Determining Contract Value  Ad contract's value shall be determined cumulatively. The value of the original contract period, along with any renewal options, extensions, and amendments shall be included in  determining the contract's value. 1.2.5 Contract Term  The contract term, or length, shall not be for more than three years, including all extensions and renewals, without the prior approval of the SPO or its designee. The determination will be based on whether the longer period would be advantageous toi the state. All requests for extended contract terms must be submitted for approval. Requests must be  approved prior to posting.  1.3 Identifying the Need (Goods and Services)  The purchasing agency or university procurement office shall be responsible for developing internal policies to identify and define the entity's procurement needs. Together, the procurement office and business owners have a fiduciary responsibility to procure goods and services using good judgment, as well as proceeding in accordance with all statutes, rules, policies, and procedures that govern public procurement practices. Identifying needs should result in a documented business justification to procure the goods  and services. 1.3.1 Goods  Goods means all non-IT related goods, including equipment, materials, or supplies requested for purchase. 01 NCAC 05A.0112(16) defines goods to mean "any tangible property, including all equipment, materials, supplies and commodities."  Page 18  NC*DOA Administr    Ag goods contract is further defined as "any agreement involving the Procurement of Goods Ifitappearsi that the acquisition of used equipment, materials, or supplies is in the public interest, competitive procedures shall bei followed wherever feasible. Used goods may! be sourced when they are available on shortnotice, are needed for the disabled, or where waivers ofc competition, emergency, or pressing needs may be justified. 01 NCAC 05B .0602. The solicitation document may or may not include a request forp prices on like new products, buti ine either case acquisition may be made on the basis of whichever is considered most advantageous for the intended purpose. Confirmation should be made thati the price of the used equipment is reasonable with respect to its age and condition. Service contracts are those contracts awarded for providing specified tasks or duties, including repair work or programs, undertaken by a vendor to fulfill requirements and specifications ofa a contract. A: service contract may also include incidental goods such as  from a' Vendor, but which may also have ancillary Services aspects."  1.3.2 Service Contracts  new parts or reports.  1.3.2.1 General Service Contracts  Service contract is defined in 01 NCAC 05A.0112(36) )as:  Any agreement for compensation involving Services and requiring a particular or specialized knowledge, experience, expertise, or similar capabilities int the Vendor. Includes contracts for Consultant Services and Personal Services and may also Contracts and amended contracts fort the provision of certain personal services (as defined ini the statute) shall be subject to the same review and approval requirements for other The services may include (by way ofi illustration, not limitation) maintenance of buildings or equipment, auditing, film production, employee training, and food service, provided the service is not primarily for review, analysis, or advice ini formulating or implementing improvements in programs or services, in which case rules relating to consultant contracts Rental Contract: A contract fort the right to use a good or product for a period of time, usually with payments made at intervals over the usage period, and normally providing short notice for cancelation. Contracts for the rental of goods shall be handled pursuant to the same rules applying to the outright purchase of goods. Rental agreements shall not include an option or obligation to purchase the good. (See Lease Purchase Contract). Lease Purchase Contract: Used when the decision for outright ownership is uncertain or when delays of ownership are intended. Options or obligations to purchase before or ati the end oft the contract term shall be provided. Third party financing is not used. Ownership transfers only if goods are purchased. Contracts may include an option to upgrade goods during lease periods without rebidding the contract. Outright purchases shall employ the  involve the ancillary purchase of Goods.  services contracts. GS 143-48.6.  shall be applicable.  same rules as lease purchase contracts.  Page 19  NC*DOA    Installment Purchase Contract: Term used only when ownership of a commodity ati time of possession is intended. Third party financing is used in most cases. It creates a security interesti in the property purchased to secure payment oft the purchase price to the seller or to an individual or entity advancing money or supplying financing for the purchase transaction. Ift the commodity is on ai term contract and third-party financing is being utilized, then the commodity is to be purchased from that contract. If the commodity is ona term contract but third-party financing is not being utilized, the commodity would not be considered ont the contract since some form oft financing would be necessary. The purchase of the commodity would be handled by the agency if valued less than their delegation or by P&Ci ifv valued more than their delegation. Whent third party financing is involved and the commodity is not on a term contract, the contract fort the commodity is handled first and must include a provision that award oft the contract is contingent upon obtaining satisfactory financing. The financing contract should also include an option for early payment without  penalty.  1.3.2.2 Professional Service Contracts  Professional Services is defined in 01 NCAC 05A.0112(25). as:  Contracted work or tasks performed by a Vendor or independent contractor possessing specialized knowledge, experience, expertise, and professional qualifications, who provides ongoing Services. A Professional Services Contract isa These services may include (by way of illustration, not limitation), the ongoing services performed by a doctor, attorney, engineer, nurse, architect, scientist and production or program service providers performing a distinct service deliverable, provided that the service is not primarily for review, analysis or advice in formulating or implementing improvements inj programs or services, in which case the rules relating to consultant  type of Service Contract.  contracts shall be applicable.  1.3.2.3 Consultant Service Contracts  Consultants provide analysis or advice in formulating or implementing improvements in programs or services. These contracts require a unique approval process set forth in 01 Agencies requesting consultant services shall submit a letter of endorsement by the agency secretary and a written justification to P&C. 01 NCAC05D. .0203. At a minimum, this  NCAC05D.  justification shall contain:  1) What services the agency desires to secure by employees of the requesting agency  2) Why the work to be performed by the consultant cannot be reasonably accomplished 3) How the work to be performed relates to the proper functions oft the agency 4) What benefits the agency expects to receive from the consultant's services 5) What the agency estimates to be the cost oft the services sought  Page 20  NC*DOA Administration    6) What potential sources of consultant services, ifany, the agency hasi identified 7) Aletter of endorsement for the proposed contract from the agency head or designee Ifthe agency is requesting authority to contract for consulting services outside ofs state government, it shall also detail what potential sources oft those services exist within state government and explain why the desired services are not available from those sources. 01 NCAC 05D. .0203. P&C and the governor's office shall approve outside consultants prior to All requests for consultant contracts must be submitted for approval. Approval must be  contract solicitation and again prior to contract award.  received prior to posting. 1.3.2.3.1 Review of Agency Requests  The documents submitted by agencies requesting authority to retain consultants will be reviewed by P&C. 01 NCAC 05D .0204. Upon completion of this review, the requesting agency will be advised, subject to such conditions as may be prescribed by the governor or  designee, to:  1) Canvass additional sources within state government 2) Solicit proposals from a private contractor have determined any oft the following:  3) Sign negotiated contracts without competitive proposals if P&C and the governor  Performance or price competition is not available  The service is required for an authorized cooperative project conducted with governmental units, or public or private nonprofit organizations The contract price is too small toj justify soliciting competitive proposals 4) Abandon the project for being outside the scope of agency responsibilities or for having no financial benefit to the state relative to the potential expenditure ofi funds.  1.3.2.3.2 Contracting for Consultant Services  Competitive Proposals: Agencies which receive approval to solicit proposals for consultant 1) Prepare the appropriate solicitation document in accordance with the rules and 2) Circulate the solicitation document to sources of consultant services as may be identified by! P&C, as well as the sources identified by the requesting agency 4) Forward the award recommendation and supporting documentation to P&C for  services shall:  disseminate among prospective service providers  3) Publicly open all proposals received  review  a) After P&C's review, the recommendation shall be forwarded tot the governor's office for approval. The requesting agency shall be notified in writing by the  governor's office that either:  Page 21  NC*DOA Administr    i. The agency head is authorized to execute contracts with one or more  approved service providers i.A All proposals have been rejected  01 NCAC 05D.0205.  1.3.2.3.3 Negotiated Consultant Contracts  Agencies receiving authorization to enter negotiated contracts for consultant services without soliciting competitive proposals shall submit the proposed contracts to P&C for review and approval prior to executing the contract, utilizing the same process as a waiver Upon completion oft this review, the requesting agency shall be notified in writing by the governor's office that the approved contract(s) may be executed by the agency head. Section 2: Procurement Methods and Considerations  ofcompetition. 01 NCAC 05D. .0204(3) and .0206.  2.1 Procurement Methods  Once a need is determined by a user at an agency, the user will submit a requisition through the agency's purchasing office. Acquisition methods usually fall within one of the  subsections below.  2.1.1 Procurement Expenditures  The appropriate procurement method is determined by the dollar value of the procurement. When the dollar amount of an expenditure is less than an agency's general delegation the procurement is handled independently by the agency in accordance with its When the dollar amount ofa an expenditure exceeds the agency's general delegation, P&C must review and approve the solicitation prior to posting and again prior to award. Thisis true for all goods and services procurements, unless the purchase is covered by an existing STC, purchasing preference, statutory exemption, special delegation, or other exemption. As small purchase is defined as the purchase of goods or services, not covered by at term contract, involving an expenditure of publicfunds valued at $25,000 or less. Because small purchases are typically less than an agency's general delegation, they can be made by agencies directly, without P&Cinvolvement. The agency's executive officer shall set forth An agency's executive officer may set an internal benchmark for small purchases thati is less than $25,000, but small purchases shall not exceed $25,000. The awarding of contracts for small purchases shall bet the responsibility of the purchasing agency. The SPO may require that a copy oft the small purchase procedures be sent to P&C. The use of competitive quotes  established procurement policy.  2.1.1.1 Small Purchases  procedures for making small purchases.  or bids is preferred, whenever practical.  Page 22  NC*DOA DeoatimemedfAdnristane    2.1.2 Procurement Card (P-Card)  Procurement cards (P-Cards) aret for official use only and shall be used in accordance with the guidelines established int the STCs maintained by P&C. All other procurement rules and policies also apply to P-Card purchases.. Agency use ofP-Cards is contingent upon  satisfactory compliance reviews, as determined by P&C. Transaction limits for state agencies and state departments  Each transaction on al P-Card is not to exceed $5,000 for general purchases and $25,000 for travel purchases. Agencies may set lower internal limits for all purchases or specific types of purchases. Purchases can be limited by amount per transaction, total per period, number of purchases per period, Merchant Category Codes (MCC), and in many other ways. Each card can have specific controls unique to that cardholder's responsibilities. Exceptions to this  limit are described in 01 NCAC 05B.1523. Transaction limits for other eligible entities  Othere eligible entities may set limits for all purchases or specifici types of purchases. Purchases can be limited by amount per transaction, total per period, number of purchases per period, Merchant Category Codes (MCC), and in many other ways. Each card can have specific controls unique to that cardholder's responsibilities. Other eligible entities should develop a P-Card manual specific tot their organization and monitor card usage on a regular Per-transaction limits of P-Card purchases may be changed only pursuant to the following a). Agency card program administrators may request higher limits on cards in emergency situations, per governor declaration. 01 NCAC 05B.1602. Such increases shall be in effect no longer than the duration of the emergency. Requests fori increased limits shall be made through P&C ift time permits and shall be reported to P&C in any case. b) Agencies may apply to the SPO for higher limits on specific transactions ori types of The SPO may adjust limits based on analysis of the P-Card program's results, ona statewide or agency basis, after taking into consideration current market trends, the economy, and recommendations received from the state controller and the state Participating agencies shall designate al P-Card program administrator, who shall bei the a) All cards requested on behalf of agencies shall be sent to the program administrator b) All cards shall show the agency name, an individual cardholder's name, the state seal, The individual cardholder named on a card shall be responsible for its possession and  basis to ensure cards are being used appropriately.  circumstances:  transactions, with prior justification.  auditor.  chief purchasing officer or chief fiscal officer (ort their designee).  (not to individual cardholders) by ai traceable delivery method. or agency logo, and indicate they are for official use only.  use. 01 NCAC05B.1523.  Page 23  NC*DOA ment    Fora al Procurement Card Single Transaction Limit Increase Request, please visit the Procurement Information Portal (PIP)and submit the appropriate form. Contact the STC  administrator for questions about P-Card usage. 2.1.3 Open Market Solicitations  An open market solicitation ist the fair and open solicitation of offers for the purchase ofa good or service, not otherwise covered by at term contract. Competition shall be reasonable and adequate fort the amount oft the expenditure and the specific requirement. Rule 01 NCAC 05B. .0301 sets out the requirements for formal and informal solicitations.  2.1.4 Statewide Term Contracts  A' "term contract" is a contract where a vendor agrees to provide goods and services at set prices, for an agreed contract term, and pursuant to specific terms and conditions. No set quantity is provided, but estimates are often given based on forecasted usage. Iti is also referred to as a requirements contract" or 'indetinite quantity contract." Statewide Term Contracts (STCs) are established by P&Cf for state agency use and in certain situations for use by other entities, such as municipalities. STCs are competitively bid. During the process ofe establishing STCs, P&C considers several factors, which include: 1) Which items are most used or purchased by the state 2) Whether lower prices can be obtained through volume discounts 3) Whether transportation costs are included ini the pricing 4) Whether warranties may be included in the contract  5) The availability of online catalogs within NC eProcurement for order processing  efficiency 01 NCAC 05B.1102.  The pricing and terms for each STC are available on the P&C website. All goods and services covered by an STC must be purchased in accordance with the established priority from above and with instructions for that contract. For example, some STCs may specifya minimum or maximum quantity or dollar value for each order. Read each contract carefully prior to ordering. Orders valued less than any minimum quantity indicated on the contract synopsis shall be obtained in accordance with normal agency procurement procedures. Orders that exceed any maximum quantity shall be forwarded to P&C for processing. Ins situations where a special item or service is needed for a particular application, the state purchasing administrator who administers the STC should be consulted for appropriate Ifaw waiver, emergency purchase, or pressing need arises, STC suppliers should be given the opportunity to satisfy the requirement, ift the needed goods or services are covered by an  action.  STC and if time permits such action.  Page 24  NC*DOA fAdministra    2.1.4.1 Mandatory versus Convenience  Mandatory STCs  Mandatory STCs shall be used by state agencies, departments, institutions; universities, and community colleges, unless exempted by statute or rule. Other entities, including schools and local government, may use these contracts, as provided int the contract.  01 NCAC05B.1101; G.S. 143-49. Convenience STCs  Convenience STCSs may be used by state agencies, departments, institutions, universities, community colleges, and other entities, including schools and local governments, as  provided in the contract. G.S. 143-49.6. 2.1.4.2 Abnormal Quantity  When an agency's STC requirements exceed the dollar amount maximum set forth in an STC, that order shall be forwarded to P&C for processing. P&C, in its sole discretion, may 6) The purchase may be authorized at the current level of pricing with the current STC 7) Additional discounts from the current level of pricing may be negotiated with the  handle the request in one oft the following ways:  vendor(s).  current contract vendor.  8) A separate solicitation may be issued fori the procurement. 2.1.5 Agency Specific Term Contract  An agency specificterm contract is a requirements contract" or' 'indefinite quantity contract" established for use byas specific agency when the needed goods or services are Agency specific term contracts are established by the purchasing agency. They shall be reviewed and approved by P&C when the expected expenditures exceed the agency's  not otherwise covered by an STC.  general delegation.  2.1.6 Waiver of Competition  Competition may be waived for a solicitation pursuant to the specific conditions listed in 01 NCAC 05B.1401. Competition: may also be waived if deemed to be ini the publicinterest by the SPO or by the agencyi ift the expenditure is valued less than the agency'sgeneral Those situations in which a waiver is appropriate are listed below and shall be documented with a signed and dated request from the agency and a signed and dated approval from the SPO or agency Procurement Chief, depending on whether the request exceeds the  delegation.  agency's general delegation.  Page 25  NC*DOA dministra    When seeking a waiver, the request shall identify those specific facts or circumstances that support a waiver; simply repeating the language oft the applicable categoryi is not sufficient. Ad clearj justification should include information around the applicable waiver condition with supporting evidence of why the waiver applies to the specific procurement endeavor, indicating the business purpose oft the good/service, who will use the good/service, and options for not obtaining the specific waiver. A waiver should also be supported by any  manufacturer documentation and market research.  Example:  An agency requests to purchase Brand X spectrometers from Vendor' Y. Vendor Yi is the only available source ofs supply for Brand X.  Unacceptable justification:  Acceptable justification: An agency lab performs critical analyses fori the presence of minute amounts of certain chemicals, and the instruments used shall be precise and well-calibrated. To give predictable results across samples, the lab has standardized Brand X spectrometers with seven currently in use ati its facility. Brand X warrants the accuracy ofi its equipment only if itis sold and serviced by an authorized dealer. Vendor Yist the only vendor authorized to provide service in North America. Attached is the authorized dealer letter from the  manufacturer to support the justification. 2.1.6.1 Waiver of Competition Conditions  Pursuant to the Administrative Code, agencies may waive competition where: 2) Ar needed product or service is available from only one: source of supply 4) Competition has been solicited but no satisfactory offers received 5) Standardization or compatibility is the overriding consideration 6) Ad donation predicates the source ofs supply 7) Personal or particular professional services are required  1) Performance or price competition is not available  3) Emergency action is indicated  8) A particular medical product or service, or prosthetic appliance is needed 9) Ag good or service is needed for the blind or severely disabled and there are 10) Additional products or services are needed to complete an ongoing job or task 12) A particular product or service is desired for educational, training, experimental, 13) Equipment is already installed, connected and in service, and it is determined 14) Goods are subject to rapid price fluctuation or immediate acceptance  overriding considerations fori its use  11) Products are bought for l"over the counter" resale  developmental or research work advantageous to purchase it  Page 26  NC*DOA    15) There is evidence ofr resale price maintenance or other control of prices, lawful or unlawful, or collusion on the part of companies which thwarts normal competitive 16) The amount oft the purchase is too small to justify soliciting competition or a purchase isb being made and a satistactory price is available from a previous contract 17) The requirement is for an authorized cooperative project with another governmental  procedures  unit(s) or a charitable non-profit organization(s)  18) Used good(s) is available on short notice and subject to prior sale waiver is deemed to be in the publici interest. 01 NCAC 05B.1401.  Depending on dollar value, competition may also be waived by the SPO or the agency ifa  2.1.7 Brand Specific Requests  Brand specific rationale can be used only when the requirement can be met by the exact specifications offered by a particular piece of equipment made by the manufacturer. A brand specific justification must explain why the product is singularly able to meet the requirements oft the user and most conclusively support the determination that no other product can fulfill the user's needs. Common examples include standardization and compatibility with existing equpment/systems or where a specific product is required to  complete an ongoing task. 2.1.8 Emergency Purchases  Ane emergency is as situation that endangers lives, property, or causes the immediate discontinuation ofa a vital program such as those essential for health and safety and which can be rectified only by immediate on-the-spot purchase (or rental) of goods or services. In an emergency, agencies should. negotiate with potential vendors in an effort to acquire the quality of good or service needed at the best possible price, delivery, terms and conditions. A: solicitation document requesting or inviting an offer shall be issued, including standard terms and conditions, unless circumstances prohibit their use. When an emergency action is necessary and the expenditure exceeds the agency's general delegation, prior verbal approval should be obtained from P&C, if time permits. Subsequently, whether or not prior approval was possible, an explanation oft the emergency purchase shall be reported in writing to P&C if the expenditure is over the agency's general delegation. If under the agency's general delegation, documentation shall be included in  01 NCACO 05B.1602.  the agency's procurement file. 2.1.9 Pressing Need  A pressing need is one arising from unforeseen causes including, but not limited to, delay by contractors, delay in transportation, breakdown in machinery, or unanticipated volume of work. Lack ofr reasonable forethought or planning is not justification for a pressing need.  G.S. 143-57 and 01 NCAC 05B.1602.  Page 27  NC*DOA    When pressing need action is necessary, and the expenditure is over the agency's benchmark or general delegation, prior verbal approval shall be obtained from P&C, iftime permits. Circumstances demonstrating the pressing need must be described in the request. Subsequently, whether or not such prior approval was possible, ift the expenditure is over the agency's delegation, an explanation oft the pressing need purchase shall be reported in writing to P&C. If under the agency's delegation, documentation shall be included ini the Agencies should negotiate with potential vendors in an effort to acquire the quality of good ors service needed at the best possible price, delivery, terms and conditions. A solicitation document requesting or inviting an offer shall be issued, including standard language, and terms and conditions issued by P&C, unless circumstances prohibit their use.  agency's procurement file.  2.2 Grant Funded Contracts 2.2.1 Conditional Grants  Where a grant, donation, or special discount is predicated upon making a purchase from the grantor, the proposed transaction shall be explained in writing and shall have prior approval oft the SPO. 01 NCAC 05B.1506. Prior to approval, the SPO shall consider the conditions placed on the grant, donation, or special discount, and how they will affect the agency and the state, the cost ofa agreeing to such conditions, and the market conditions. When a donation from a private source is predicated upon making the purchase or lease from a specific source, the purchase or lease may be made without prior approval of the SPO or Secretary. This only applies ift the donation from the private source covers 100% of  the purchase price. 2.2.2 Federal Grants  At federal grant is an award of financial assistance, the principal purpose of which is to transfer a thing of value from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law oft the United States. A granti is distinguished from a contract, which is used to acquire property or services for the federal government's direct benefit or use. When the government is procuring goods or services for its own direct benefit, and not for al broader public purpose, the law requires use ofa ai federal contract. Ifan agency receives grant money to pay for a contract, the agency must considert the nature of the relationship with the contractor. Is the relationship a vendor relationship ora sub-recipient relationship? Sub-recipient is defined as a non-federal entity that expends federal awards received from a pass-through entity to carry out a federal program but does noti include an individual that is al beneficiary of such a program.. A: sub-recipient may also be a recipient of other federal awards directly from a federal awarding agency. Vendori is defined as a dealer, distributor, merchant or other seller providing goods or services that are required fori the conduct of ai federal program. These goods or services may be for an organization's own use or for the use of beneficiaries oft the federal program. Ift the relationship is that ofa as sub-recipient, then federal guidelines and cost principles must be followed. Federal grants have specific compliance requirements which are outlined in  Page 28  NC*DOA epartment ofAdministration    the "Audits of States, Local Governments and Nonprofit Organizations" provided by the United States Office of Management and Budget. Agencies are encouraged to ask federal agencies administering the particular grant programs to identify essential and mandatory clauses that should be used int the state's sub-recipient agreements. It should be noted that state agencies distributing grant funds have an obligation to ensure that sub-recipients  adequately perform all agreed-upon: services.  Sub-Recipient  Vendor  Sub-recipients are. non-federal entities expending federal awards from pass- through entities performing federal programs. Federal agencies may award sub-recipients directly, but not beneficiaries ofs such programs.  Vendors are prime and/or independent contractors, suppliers, bidders, companies, firms, corporations, partnerships, individuals, or other entities responding to  solicitations.  2.3 Purchasing Preferences  There are a number of purchasing preferences that should be considered prior to issuing a  solicitation.  Step1 Purchase from Correction Enterprises  Step2 Purchase from Nonprofit Workcenters for the Blinda and  Severely Disabled*  Step3 Purchase from an Existing Statewide Term Contract  Step4 Solicit Competitive Offers Unless otherwise covered under any other current STC  Page 29  NC*DOA    2.3.1 Correction Enterprises  The Department of Public Safety Correction Enterprises has a preference statute that controls the sale of prison industry products and prohibits their sale to the private sector. G.S.148-134. Pursuant to this statute, all agencies shall give preference to products made by Correction Enterprises, which are manufactured or produced within the state prison system and offered for sale to state entities by the Department of Public Safety. This preference requirement also applies to all community colleges. This preference is provided Products available from the private sector, that are also offered by Correction Enterprises, shall be purchased from the private sector only when iti is determined that the Correction Enterprises product will not satisfy the standard specifications ori the reasonable requirements oft the entity or the goods will not be available when needed. The procurement file should contain documentation from Correction Enterprises stating that the item(s) cannot be supplied. Competitive bidding shall not apply to goods available from 2.3.2 Nonprofit Work Centers for the Blind and Severly Disabled Session law 2021-180, Section 20.12 (a) through (c) amended G.S. 143-129.5 to require that P&Cannually canvass nonprofit work centers fort the blind and severely disabled to determine what goods and services they offer and to secure contracts to make those goods G.S. 143-48.2 was also amended to require that state entities purchase from those contracts 1) The purchase of goods does not exceed the agency's general delegation.  for all procurement dollar thresholds.  Correction Enterprises.  and services available to the state entities that require them.  so long as:  2) The goods or services are not available from an STC. 3) The goods are not available from Correction Enterprises.  4) The goods or services must be of suitable price and quality, as determined by the Where needed goods or services are not available from Correction Enterprises, state entities must determine whether those items can be supplied pursuant to the STC established with the nonprofit work centers for the blind and severely disabled.  agency.  2.4 Other Considerations  2.4.1 Use of Purchasing Power for Private Purposes  The purchasing power oft the state or its agencies shall not be used for private advantage or gain. Purchases under contracts made by the state or the agency shall not be allowed for personal use or ownership by an employee or other individuals. G.S. 143-58.1(a). Violation oft this provision is a Class 1 misdemeanor. G.S. 143-58.1(b). However, there are two  exceptions provided by G.S. 143-58.1(b):  Page 30  NC*DOA    1) The agency through which the goods or services are procured has established policies and procedures permitting such purchases in order to provide for the mutual benefit of such persons and the agency, orf for the public benefit or convenience. 2) Such policies and procedures, including any reimbursement policies, are complied with by the person permitted to use the purchasing or procurement procedures.  2.4.2 Auctions  Auctions are a means by which an entity can purchase items offered for sale to the highest bidder. If buying an item that is not covered by an STC and the dollar amount is under the agency's general delegation, the executive officer oft the agency may authorize purchase through auction. Auction purchases must otherwise follow procurement rules and Ifthe dollar expenditure is over the agency's general delegation, then prior approval to participate in the auction must be obtained from the SPO, unless iti is for an emergency ora pressing need purchase. Those purchases would then be governed byt the rules applying to  processes.  Emergencies and Pressing Needs, as discussed above.  2.4.3 Reverse Auctions  Reverse Auctions are authorized by G.S. 143-49.1.P Pre-qualified vendors are allowed to submit consecutive bids that lower the purchase price and costs of a given procurement until noi further such reduction occurs. Agencies using this approach should refer to the established STC for appropriate procedures in the solicitation document to help clarify how  the procurement will be conducted. 2.4.4 Cooperative Purchasing  Where an agency is a participant in an approved cooperative project with another governmental entity or with a non-profit organization, that contract may be established Pursuant to 01 NCAC 05B.1513 the goods and services necessary for the cooperative project should be procured through normal processes unless the SPO permits one oft the 1) by making the acquisition on behalf ofs such governmental activity or charitable non- 2) bya authorizing acquisition on the state's behalf under the provisions of G.S. 143.8 3) bya authorizing acquisition on the state's behalf under the provisions of another: state ora another governmental entity, provided due consideration is given by the SPO to the differences in purchasing rules, regulations, and procedures of the contracting Cooperative purchases with a governmental entity or a non-profit organization should still follow procurement rules, including use ofs solicitation documents, inclusion of standard  pursuant to a waiver of competition. 01 NCAC 05B.1513.  following alternative acquisition methods:  profit organization  entity  Page 31  NC*DOA Administra    terms and conditions, and any additional processes dictated by the amount ofa Section 3: General Procurement Planning and  procurement expenditure.  Guidelines  3.1 Preparing the Written Solicitation  The solicitation documents are mechanisms through which agencies seek vendors to provide needed goods and services. The solicitation document provides the basic information of who, what, when, where, why, and how, which should be conveyed in a clear, concise, and logical sequence. The solicitation document must provide information about the procurement process, the goods and services being procured, and contract pertormance expectations ift the vendor is selected for award. P&C: solicitation document templates provide this framework and are required for use in all informal and formal procurements. A copy oft the posted solicitation document and each bid received into an official procurement file. 01 NCAC05B.1903.  3.1.1 Terms and Conditions  P&C maintains and provides the North Carolina General Terms and Conditions for use in state contracts. These terms are written broadly in order to provide legal protection in a variety of procurements. All solicitations valued more than the small purchase of $25,000 Inc certain instances, the standard terms and conditions may be modified. Modifications to The agency's legal counsel for contracts valued less than an agency'sgeneral P&C's Contract Management Section (CMS) for contracts valued more than an  shall contain the North Carolina General Terms and Conditions.  terms and conditions shall be approved by:  delegation  agency's general delegation  Some entities are exempt from CMS review. Most notably, universities rely on their general counsel for review and approval of contracts. G.S. 114-8.3(b).  3.1.2 re-Bid/rre-rroposa Conferences or Site Visits When necessary, agencies should hold conferences or: site visits with potential vendors as the first process of the timeline of the solicitation. While these conferences provide opportunities to emphasize and clarify complex or critical solicitation requirements, eliminate ambiguities or misunderstandings, and permit vendor input, agencies should consider whether attendance is required for a vendor to understand the solicitation and  submit responses.  Conferences or site visits should be conducted with potential vendors when issuing  solicitations for complex or critical requirements.  Page 32  NC*DOA Administration    Attendance at conferences or site visits may be either:  Mandatory  Urged and cautioned (optional)  Any conference or site visit requirements should bei included int the solicitation Att the conference or site visit, as sign-in roster should be provided. The agency representative shall: sign the attendance roster. Only attendees who have arrived ont time shall sign the attendance roster. Attendees shall indicate on the sign-in sheet all of the parties they represent. Late-comers may attend but shall not sign the attendance roster. This is mostly relevant to mandatory conferences. Forr mandatory site visits, only vendors who are represented on the attendance roster and who attend for the required duration oft the site visit will be deemed to have met the attendance requirement. Addenda shall be issued to address vendor questions and any agency modifications Ifadverse circumstances dictate, virtual conferences may be utilized. Agencies should ensure that accurate attendance is kept for the virtual conference. For example, vendors may be asked to put theiri information ini the chat function, which can then be exported and saved to the official procurement file.  document.  tot the solicitation resulting from the site visit.  3.1.3 Response Time  Certain procurements require sealed offers, which are defined as offers that remain unopened until the public opening time stated int the Solicitation. 01 NCAC 05A.0112. Sealed offers are required for formal solicitations, but informal solicitations may also require When sealed offers are required, the solicitation document will state the deadline for vendor responses to be received. The bid opening dates should provide vendors with ample time to respond. Sealed bid opening dates shall be no less than 10 calendar days from the date the solicitation is posted. NCAC05B. .0316(a). Complex requirements may require longer preparation times and should provide sufficient time for vendors to prepare  sealed offers at the agency's choosing.  ar response.  3.1.4 Acceptance Period  In order to allow the state time to conduct the bid evaluation and any negotiations, vendors should agree to hold their bid open for a certain period oft time. During this time the vendor must honori the terms ofi its bid submission, including pricing, ift the state selects the vendor  for contract award.  Page 33  NC*DOA partment Administrati    Bids should be valid for a minimum of 60 calendar days unless otherwise noted in the solicitation documents or the vendor's bid response. The acceptance period should be adjusted based on the subject matter oft the procurement and whether negotiation is anticipated. Complex negotiations with sophisticated vendors can take weeks or months to  complete.  3.1.5 Specifications  "Specification" means any description oft the physical ori functional characteristics of, or the nature of, the goods or services to be procured. 01 NCAC 05A.0112. Specifications can either enhance or inhibit competition depending on how they are written. Goods and services specifications must be written to meet agency needs while maximizing competition and should not be overly restrictive or descriptive in favor ofa a particular Vendor's product. Several specification categories are listed herein in the preferred order ofuse. Buyers should analyze incoming requirements with a view towards soliciting the requirement on a generic specification basis. Generic specifications may be: a) Performance specifications, which seti forth the pertormance requirements b) Design specifications, which set forth the essential characteristics of the items solicited When it isi impractical to develop a generic specification, al brand name may be used to convey the intended style, type, character, and quality of the article desired. Unless otherwise provided int the solicitation document, the name ofa certain brand, make, or manufacturer does not restrict bidders to the specific brand or manufacturer named. Any offering which the state, ini its sole discretion, determines to be the equivalent oft that specified, considering quality, workmanship, economy of operation, and suitability for the purpose intended, shall be accepted. The solicitation should inform vendors, however, that the vendor must identify the equivalent product it intends to supply in its response. A brand specific specification restricts the acceptable products to those of one or more specified manufacturers. Brand specific rationale can be used only when the requirement can be met by the exact specifications offered by a particular piece ofe equipment made by Use ofa a brand specific specification must be approved in advance based on a written justification. Approval from P&C is required if the solicitation is expected to exceed the agency's general delegation. The agency must internally approve the justification ift the procurement is valued less than the agency's general delegation. The approval should be  3.1.5.1 Generic (Performance and Design)  3.1.5.2 Brand Name or Functional Equivalent  3.1.5.3 Brand Specific  the manufacturer.  documented int the official procurement file.  Brand speclficspecifications may be appropriate in situations such as:  Page 34  NC*DOA Administra    When the desired product must be compatible with or is an integral component of the existing equipment or products, or where prequalification of products is When a product is covered by a patent or copyright; when the product must yield When the product is one with which a user has had extensive training and experience, and the use ofa any other similar piece of equipment would require Upon solicitation, every effort must be made to obtain full competition among the resellers which carry a manufacturer's product. Protests may occur if written solicitations are ambiguous or inconsistent. Agencies should use caution when developing specifications in  necessary to: support specific needs ofa a program  absolute continuity of results  considerable reorientation and training  order to minimize the possibility ofal bid protest. 3.1.6 Contract Pricing Structures  There are several types of contract pricing structures available to procurements depending  on the nature of a solicitation. The most common are discussed below.  3.1.6.1 Fixed Price Contracts  A fixed price contract is where firm unit or total prices are established upon contract award for goods or services. A fixed price contract may result from bidding or negotiation processes. They are used when specifications are clear, and costs are predictable. There is minimal risk to the purchasing agency when firm fixed price contracting is used because the financial requirements are known. This type of contract encourages efficient performance and is the least costly to administer. The use of firm fixed price contracting may be inappropriate if requirements or specifications are unclear or indefinite. 3.1.6.2 Fixed Price with Escalation or De-Escalation  This type off fixed price agreement provides for price adjustments up or down if specified contingencies occur. This type of contracting may result from bidding or negotiation processes. Iti is usedt to minimize fluctuations in vendor's prices due to unstable markets. The contract period is typically over a long period oft time. The use off fixed price contracts with escalation or de-escalation reduces the need for contractors to inflate the cost of goods to offset unstable markets or economic conditions. The risk of cost increases or decreases is partially transferred to the buyer. Administrative costs may be increased as a result oft the greater contract administration efforts that are required for this type of contract. Normally, any upward price adjustment should be justified and approved by the state prior to its  effectiveness. 3.1.6.3 Term Contracts  Term contracts, also called "requirements contracts," are agreements for performance over a specified period oft time, when quantities are indefinite. They have no fixed total dollar amount; rather, they are unit price based. They establish at framework under which goods and services are provided, but it ist the degree of purchase order activity against the  Page 35  NC*DOA    contract that will ultimately determine the contract's total value. These contracts are typically established as State Term Contracts (STC) or agency specific term contracts. Effective administration oft these open-ended agreements requires that the agency maintain some record of purchasing activity against these contracts. Purchasing must have a means to capture, analyze, and report usage information, to allow for monitoring volume and discount opportunities. Purchase order activity must be periodically reviewed for compliance with the terms oft the agreement. Contract expenditure activity should always be examined prior to the exercise of any renewal provision or re-solicitation.  3.1.6.4 Time and Materials (T&M)  Time and materials agreements for goods or services are based on billable hours, which include overhead, profit, and materials. The details oft the work are known, but the extent of the work may be unknown. T&M contracts are suitable for maintenance, design, engineering, and emergencies, among others. Competition is sought on the basis ofl labor-hour rate. These contracts may be expensive to administer. Whenever an agency uses a cost- reimbursement agreement such as T&M to acquire needed goods or services, iti is essential that the cost structure builds in deliverable milestones and retainage percentages to allow for accountability inj performance. Billed costs should be analyzed (and challenged when When a T&M agreement is used, agencies must request a detailed job estimate which should include the amount and type of contract labor with associated rates and itemized material costs to allow evaluation oft the reasonableness of its cost elements before authorizing the work to be performed. Ifiti is determined that the estimate is not reasonable or in accordance with the terms oft the contract, negotiation or the solicitation of additional estimates may be Contracts in which payment is calculated as cost-plus-a-percentage-ol-cost are prohibited.  appropriate) prior to their approval for payment.  considered, if permitted by the solicitation.  G.S. 143-52(c).  3.1.6.5 Blanket Purchase Orders  Blanket purchase agreements (BPAs) are contractual relationships to obtain small dollar value expendable operating supplies or services for which low or erratic demand usage exists. A set ofterms and conditions are agreed upon between the buyer and seller wherein the seller will deliver, or permit pick up of, supplies ordered by the individual who has received authorization from the purchasing office. The prevailing market price, less any trade or volume discounts, as may be agreed upon, is charged and invoiced on a consolidated The principal advantage ofa a BPA is the ability to delegate ordering authority to the user level, resulting in quicker access to the goods or services. Consolidated invoices are processed, which reduces the paperf flow and administration. The success ofthis arrangement is dependent upon the establishment and enforcement of proper controls to  (usually monthly) basis.  monitor contract usage.  Page 36  NC*DOA Administra    3.1.6.5 Cost Plus Percentage of Cost Contracts  Cost plus percentage of cost contracts are typically defined as contracts under which the vendor receives payment for indeterminate costs plus a stated percentage or amount of profit based upon such costs. This pricing structure may not be used for any purpose,  except as provided in G.S. 18C150.65.143520. 3.1.7 Commodity Codes  The state utilizes the United Nations Standard Products and Services Code (UNSPSC), the  global standard of commodity and service codes. Standardized commodity codes are used to: Provide a standardized method of sourcing Identify the procurement as goods or services Provide electronic notification of bidding opportunities Provide detailed history of commodity purchases Increase savings and efficiency for the state  Identify term contract items  NOTE: The IPS's six- digit commodity codes are derived from UNSPSC's eight-digit system. lfyou cannot find the desired commodity code in the IPS, search UNSPSC and use the first six digits of that result.  Analyze spend data  Correct commodity code usage will promote accuracy in reporting and provides P&C with the vital statistics needed to determine contract usage and vendor participation. Use of correct commodity codes is also a factor considered in compliance reviews. Agencies may search for commodity codes by accessing the P&C website ort the UNSPSC website. The NC eProcurement website Public) Vendor Search allows North Carolina eProcurement registered vendors to be searched by commodity code.  3.1.8 Payment Terms  Invoices shall be paid on time as agreed, typically no later than 30 calendar days after receipt ofa a correct invoice or acceptance of goods and services, whichever is later. Using agencies are responsible for all payments to the contracted vendor. Solicitation payment terms shall comply with policies established by the Office of State Controller. Evaluation criteria for award may be based on the lowest cost technically acceptable methodology or the Best Value Trade-Off method. Other factors tol be considered must be  3.1.9 Evaluation Criteria  identified ini the solicitation document.  Page 37  NC*DOA Administratic    3.1.9.1 Lowest Cost Technically Acceptable Method  For this evaluation method, the solicitation shall specify that the award willl be made on the basis oft the lowest evaluated price of those bids that meet or exceed the technical requirements. The solicitation shall provide the specifications that establish technical 1) Trade-offs between price and non-price factors are not permitted.  acceptability.  2) Vendor responses are evaluated for acceptability but are not ranked using the non- 3) Ifapplicable, clarifications, communications, and negotiations may be permitted after  price factors. receipt of the offer.  3.1.9.2 Best Value Trade-Off Method  The Best Value method of award is at trade-off method of source selection that is used when itis in the state's best interest to award to a response other than the lowest priced offer. Best Value is determined by evaluating which vendor response provides the best trade-off between price and performance. G.S. 143-52 and 143-135.9. Fora solicitation using a 1) All evaluation factors that will affect the contract award decision and their relative 2) Price must be considered as an evaluation factor in the selection process. The solicitation shall state the importance or numerical weight of all evaluation factors 3) Offers are ranked using the evaluation factors and their relative importance or weight as defined int the solicitation document. The relative overall ranking of any offer may be adjusted up or down when considered with, or traded-off against, other non-price 4) For example, an offer with the lowest price when compared to other offers would normally receive the best ranking in the price evaluation category. However, if other non-price evaluation factors received low rankings, the overall ranking oft the offer 5) The evaluation criteria must be clear and concise regarding the ranking and how the evaluation will be performed (i.e., points or narrative of strengths and weaknesses). 6) Ifapplicable, clarifications, communications, and negotiations may be permitted after  trade-off source selection method, the following shall apply: importance shall be clearly stated ini the solicitation.  including price.  factors.  would be reduced.  receipt oft the offer. Prices offered  G.S. 143-52 also provides the following factors for award:  Best Value, as the term is defined in G.S. 143-135.9(a).1) General reputation and performance capabilities of the bidders  Quality of the articles offered  Page 38  NC*DOA    Substantial conformity with the specifications and other conditions set forth in the  request for bids  Suitability of the articles for the intended use Personal or related services needed Transportation charges Date or dates of delivery and performance  Such other factor(s) deemed pertinent or peculiar to the purchase in question Additional award criteria may bei included ini the solicitation document, including, by way of  example:  Location and availability ofs service, repair facilities, and personnel Demonstration of proposed equipment, ifr required  References provided  3.1.10 Transportation/Freight  The state shall require Free on Board (F.0.B)Destination as the transportation/freight shipment method int the solicitation, unless in rare cases circumstances require an alternate F.O.B. is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. F.O.B. Destination means the seller retains the risk ofl loss until the goods reach the buyer. Including anything other than F.O.B. Destination in a contract could result in the state being responsible for the goods lost during shipping and having to pay fori the goods even ifthey are never received. Ift the goods are destroyed in transit, agencies may also have to pay for replacement goods and When goods are shipped, purchase order numbers must be shown on packages and shipping manifests to ensure proper identification and payment ofi invoices. Shipments shall include complete packing lists. Ensure that these requirements are in the solicitation document and any resulting contract, sO the vendor is aware oft the requirements. Suppliers shall not ship products until they have received an official purchase order from the agency. Agencies should review charges and compare them against award documents to determine if shipping costs are accurate and may be approved for payment. F.O.B. Destination - It is the policy oft the state to: solicit bids for goods F.O.B. Destination, which means that the seller owns and assumes all risk fort the goods until they are accepted ati the designated delivery point. The cost ofs shipping the goods should bei included in the quoted price or by the bidder or offeror as a separate line item, but the invoice amount F.O.B. Origin - F.O.B. Origin means that the state takes ownership ati the seller's location and would be responsible fori filing claims if the goods are damaged during shipment.  method.  could, in effect, end up paying twice.  cannot be more than the total bid price.  Page 39  NC*DOA fAdministrati    Before approving an invoice for payment, the agency should review it and compare it to the award document to determine ift the shipping costs are accurate. Ifac charge on the invoice  isn not accounted fori in the bid, it cannot be approved for payment.  3.1.11 Product Samples  Requirements for product samples shall be clearly indicated ini the solicitation document. Vendors shall furnish samples ofi items offered upon request, at no cost to the state (including shipping). Samplest that are not destroyed shall be returned upon written request at the vendor's expense. Samples not returned to the vendor shall become property oft the  state. Samples shall be managed as follows: 1) Samples should be labeled with the: a) Purchaser's name b) Commodity c) Solicitation number  d) Term contract number or quote number e) The projected disposal date fort the samples accordance with the instructions provided in this section.  2) Where testing is required, the person in possession oft the test samples should return them as soon as possible after testing has been completed or dispose oft them in 3) Sample items fori term contracts shall be held for 90 calendar days following 4) The prompt return of samples to the vendor shall bei the responsibility of the purchaser or engineer, ifthe vendor requests their return. 5) Samples released to the using agency by the vendor or unclaimed after 90 calendar days from completion of delivery shall be either puti into use within the using Agency, transferred to another state agency, recycled, sold through State Surplus Property 6) The disposition ofs samples shall be documented int the official procurement file. Ifs specified int the solicitation document, evaluators may request oral presentations or discussions with vendors to clarify the materials or services presented in the vendor's response. Presentations shall not be used to materially alter or expand the scope oft the solicitation, and evaluators are not required to request clarification from vendors but may doso at their option. Failure to perform requested demonstrations may! be grounds for The state may require vendors or their authorized representatives to demonstrate the exact offered models to ensure products are suitable for their intended use before contracts are awarded. Demonstrations shall be performed upon request att the agency's facility free of  expiration oft the contract.  Agency, or discarded as trash.  3.1.12 Vendor Presentations and Product Demonstrations  disqualifying the response from further consideration.  Page 40  NC*DOA    charge toi the state. Demonstration results shall be documented in the file and be  considered ini the evaluation.  3.2 North Carolina Procurement Initiatives  In an effort to support the state's economy, solicitations should contain information regarding initiative to encourage the use of resident vendors and Historically Underutilized  Businesses (HUBs).  3.2.1 North Carolina Resident Vendors  In an effort to utilize the buying power oft the state to encourage North Carolina companies to do business with the state, stimulate economic development, and create jobs in North Carolina, Executive Order 50, Enhanced Purchasing Opportunities for North Carolina Businesses, was issued. This Executive Order gives the North Carolina vendors opportunity to select the option to match the price oft the lowest responsible nonresident bidder, if the North Carolina resident bidder's price is within 5%) or $10,000, whichever is less, oft the nonresident bidder's price. The North Carolina resident bidder will first be offered the contract and will have two business days to accept or decline the award based ont the  lowest responsible bidder's price.  3.2.2 HUB Encouragement and Participation  Promoting and encouraging HUB participation in procurement opportunities is central to the economic growth and stability oft the state. Pursuant to Executive Order 24, there is an expectation for all state agencies to pursue a goal of at least 10% oft their total expenditures be with certified HUB firms. All cabinet agencies are required to work with DOA's HUB Office to develop a HUB utilization plan and a process to monitor progress. While thisi is limited to cabinet agencies, all departments, institutions, and agencies oft the state should Itt therefore becomes important for state entities to create opportunities for HUB vendors when researching procurement options. An area with great potential is procurements that are valued under an agency's general delegation or bid value benchmark. These procurements often fall under the small purchase and informal procurement processes Certified HUB vendors can be found on the HUB Office website and searched by commodity or by using the NC eProcurement Vendor Search function. For all solicitations valued above an agency's general delegation, HUB participation information shall be incorporated into the solicitation, and the agencies procurement office should work closely  support this initiative.  which provide greater procurement: flexibility.  with the HUB Office to partner in initiatives. 3.3 Procurement Request Process  Solicitations that are expected to exceed an agency's general delegation must be reviewed by P&C. There are two required review and approval processes for each solicitation, one  prior to posting and one priori to award.  Page 41  NC*DOA    Priort to posting, a completed draft solicitation must be provided, to P&C for review. The submission of the review should follow the appropriate process based on use of NC eProcurement or the Procurement Information Portal (PIP) for non-Ariba agencies. The Preliminary Review Checklist should accompany the request and can be found ini the NC Verbal requests to P&C fora approval to move forward with a solicitation are not acceptable substitutes for written requests, except for emergency or pressing need procurements, which require that written notitication from the agency be sent to P&C following the The assigned P&C Strategic Sourcing Team will review the solicitation request and determine the appropriate action for a solicitation based on the content oft the procurement request. Communication from the Strategic Sourcing Team will be provided with either approval oft the request, the need fori further feedback or collaboration that is required for approval, or denial oft the request with feedback explaining the reasoning and appropriate  eProcurement system ort the PIP.  procurement. 01 NCAC05B.1602.  next steps.  3.4 Control Numbers  In addition to any unique identifier given to a procurement by the purchasing agency, procurements handled by P&C may be assigned a unique control number, which remains with the procurement file. The control number will be provided to the purchasing agency  for reference.  3.5 Spend Analysis  Spend analysis is the process of collecting, cleansing, classifying, and evaluating procurement data to reduce procurement costs, improve efficiency, and monitor compliance. It can also be leveraged in other areas such as goods management, strategic sourcing, and other business domains including inventory management, budgeting,  planning, and product development.  There are several benefits to performing spend analysis: More precise financial and annual reports Find opportunities to cut costs Toc create accurate, spend forecasts Tos spot unacceptable spending Tor manage risk and diversify vendors Improve strategic sourcing decisions Improve supply management  Page 42  NC*DOA    Spend Analysis helps to answer the following questions: With whom am Ispending funds? Amlgetting whatl I paid for? Ist this purchase necessary?  WhatamIreally spending? Are there hidden costs?  Page 43  NC*DOA fAdministratio    Core Areas of Spend Analysis  Explanation  Visibility refers to the ability of an organization to have a comprehensive view oft the metrics that drive improved cost savings, process efficiency and supply-chain performance. Spend visibility facilitates analyzing past spend that can be utilized for planning future Spend visibility goes beyond tracking spending as it gives both a detailed and holistic picture ofh how money is moving through an agency. Spend visibility allows agencies to stay within budget by providing a real-time count of how much oft their budget has already been spent. Data should be analyzed to identify opportunities for cost savings and other procurement improvements. Analysis allows agencies to ensure they have negotiated the best contract deals per supplier and toi identify opportunities for modifying the number of suppliers per category or for negotiating better rates. Process data shows areas for possible process improvements. Itp provides information on the number of expected solicitations and provides fort the identification of areas for process optimization. This allows agencies to respond to solicitation development needs, identify vendors who routinely provide small purchases, and identify opportunities for streamlining purchasing  Visibility  expenditures.  Analysis  Process  processes.  Page 44  NC*DOA fAdministr    Section 4: Procurement of Goods and Services  4.1 Scope of Work and Specifications  The primary purpose ofa a scope of work or purchase specification is to provide al basis for obtaining goods or services that will satisfy a particular need at an economical cost. Scopes of work or purchase specitications define the needs and specifications ofa a particular procurement and determine the appropriate procurement method. North Carolina's procurement program is built ont the principles of competition and transparency. For each procurement, purchasers should:  Seek competitive offers from qualified and responsible supply sources, unless Develop specifications that are designed to reasonably satisfy the agency's needs Specifications are the physical or functional characteristics oft the goods or NOTE: Specifications should not be confused with requirements, which prescribe the process or procedure that a vendor must comply with to be deemed responsive and further considered for award.  exempted by statute or rule  but are not unduly restrictive and will maximize competition  services offered by the vendor.  01 NCAC 05A. .0112(29) and (37).  Encourage competitioni in the open market, resulting in the best possible contract for  the needed goods or services  4.2 Information Gathering Before Preparing a Solicitation A Request for Information (RFI) is a document used to gather information from potential suppliers ofa a good or service. RFIs are used primarily as a planning and information gathering tool. RFls are also used to identify industry standards, best practices, potential performance measures, and cost or price structures, or to generally ascertain the level of Agencies are not required to use this information in developing future solicitations but may find vendor responses useful in that regard. When using RFI responses to develop solicitations, agencies should take care to avoid developing specifications that favor the vendors that responded to the RFI. While endorsuppledimomaton may be used to develop a solicitation, the solicitation document should not be directly based on any oft the vendor's specifications, marketing data, or RFI response text sO that no advantage is provided to any particular vendor. For example, do not cut-and-paste information froma a  interest of prospective respondents.  vendor's RFI response into the solicitation.  Page 45  NC*DOA    Request for Information (RFI)  Provide as much information as practical to define the type ofi information that is Indicate iti is notasolicitation, request for offer, or an offer; and that responding Does not include the North Carolina General Terms and Conditions because no  being sought.  shall not result in a contract award. contract formation is intended. Should include the following sections:  An overview of the desired good or service to be provided  Information requested from the vendor Response expectations  4.3 Determining the Appropriate Solicitation Document When developing a solicitation, it is critical to determine the appropriate procurement method because ity will be a major factori in the planning process. For example, the average procurement lead time for an Invitation for Bid (IFB) can differ significantly from a Request for Proposals (RFP). The decision to issue an IFB or RFP depends on whether the goods or services required are clearly defined by the purchasing agency or whether the agency is Invitation for Bid (IFB) The IFB is a formal, written solicitation document used for seeking competition and obtaining offers for easily defined goods and simple services. This document contains the specifications, instructions to vendors, standard terms and conditions, and any additional information the vendor may need to provide a bid response. This document is typically used for open market bids, agency specific term contracts, and Statewide Term Contracts (STCs). An IFB is typically used with a "lowest price that meets the specifications" evaluation where cost is the most relevant factor, and an in-depth "Best Value"a analysis is not needed. IFBs are required to be posted ini the NC eProcurement Ing general, an IFB's timeline is four to six weeks, depending on complexity. Agencies should Request for Proposals (RFP)- The RFP is a formal, written solicitation document used for seeking competition and obtaining offers fora a solution-based proposal for goods and services, rathert than just looking for pricing, as found in an IFB solicitation. This document contains a defined scope of work, instructions to vendors, standard terms and conditions and any additional information the vendor may need to provide a proposal response. The RFP should be used when the agency is relying on the vendor to propose a solution that will meet the agency's needs and where price is not the only determining factor for award This document is typically used for open market bids, agency: specific term contracts and STCs. An RFP is typically used with a Best Value trade-off evaluation and must identify the  looking to the vendor to propose a solution.  system in order to solicit vendor responses.  allow for the time needed for review and approval by P&C.  Page 46  NC*DOA epartment ofAdministratic    evaluation criteria on which the evaluation will be based. RFPS are required to be posted to In general, an RFP'st timeline can be six to twelve weeks, depending on its complexity. Often this timeline can be extended for various reasons (i.e., complex questions and negotiations). Agencies should manage the timeline of expected award to allow for required reviews by Request for Quote (RFQ) -The RFQ is used for non-advertised procurements. This document contains instructions for vendors, specifications, and terms and conditions. The RFQ may be used to solicit vendor responses pursuant to a waiver of competition, ori itmay be used for informal purchases that are valued at less than an agency's general delegation. An RFQ cannot be used as the basis for award when competitive bidding is required, such as fort formal purchases that exceed an agency's general delegation. RFQs are issued tot the In general, an RFQ's timeline is flexible since there is no required posting or response time. Timelines within RFQs should account for the complexity of the request. Agencies should manage the timeline of expected award to allow for required reviews by P&C. 4.4 Determining the Appropriate Solicitation Method Inaddition to determining the correct solicitation document for a specific procurement, iti is essential to identify the process by which a procurement should be managed. This is based  the NC eProcurement system in order to solicit vendor responses.  P&C.  intended vendors, using email, for response.  on the procurement's estimated cumulative contract value. There are three thresholds for determining the solicitation method: 1) Small Purchases valued less than the small purchase threshold  2) Informal Purchases valued between the small purchase threshold and an agency's 3) Formal Purchases valued in excess of an agency's general delegation The characteristics ofe each are discussed below. These processes may vary where the procurement ist the subject of a waiver of competition or falls under a special delegation, Purchasing agencies should also determine whether the goods or services sought are available from Correction Enterprises or from a nonprofit work center for the blind and  general delegation  exemption, emergency, or pressing need.  severely disabled.  NOTE: Legal Review of Contracts Valued Over $1 Million  Pursuant to G.S. 143-50.1, all proposed solicitations for "supplies, materials, printing, equipment and contractual services" with an estimated value exceeding $1 million must be reviewed by the Contract Management Section of P&C prior to posting and prior to award, unless otherwise exempted bys statute. Legal counsel should be included in the solicitation  preparation process as early as possible to prevent delays.  Page 47  NC*DOA    4.4.1 Small Purchases - $25,000 or Less  Asmall purchase is a solicitation for goods or services, not covered by a term contract, involving an expenditure of publicf funds valued at $25,000 orl less, including all extensions and renewals. 01 NCAC 05B. .0301. Competitive bids are not required for small purchases; P&C's review and approval is not needed fort these small dollar purchases; thus, purchasing agencies shall create their own policies and procedures for internal use. The examples below are the most common methods used for small dollar purchases: Vendor quotes (should contain vendor logo, contactinformation, item or service description, quoted prices, delivery terms, F.O.B. point, and date of quote)  however, purchasers can still seek multiple quotes.  Written informal quotes (Fax, phone, or email quotes) Ifseeking phone quotes, keep a record of: Item or service description Quoted prices Deliveryterms F.O.B.p point Contact name Date of quote  Collaborative requisitioning in Ariba Request for Quote (RFQ)  For all small purchases, the purchaser should ensure delivery and freight is included in the total cost. Verbal quotes should be confirmed in writing. P-Cards may be used to pay for Ifthe vendor's quoted price is not fair and reasonable based on the estimated cost, seek competition from at least one additional vendor. Extensive research is not necessary. Orders should be placed through the eProcurement release of a purchase order to the vendor, unless otherwise exempted. Purchase order numbers are automatically assigned in  small purchases, in accordance with purchasing agency policies.  the system.  4.4.2 Informal Purchases  Where the cumulative value ofa a procurement, including all extensions and renewals, is valued between the small purchase benchmark of $25,000 and an agency's general delegation, and the subject matter is not otherwise covered by an STC, the purchasing agency shall comply with the following procedures, unless otherwise exempted: Solicit competition, but sealed bidding is not required. This is often referred  to as "three quotes and a buy."  Page 48  NC*DOA tment ofA Administration    Issue solicitation documents to request or invite offers that include standard language, including the North Carolina General Terms and Conditions issued by P&C. The methods used for informal purchases include:  Collaborative Requisitioning Informal Quote Request (IQR) Request for Quote (RFQ)  Handle all vendor negotiations, including those related to the contract terms Any modifications to the terms and conditions should be reviewed by agency counsel and may not conflict with P&C's North Carolina Review offers received and award contracts without P&C involvement. Hear bid protests or other vendor challenges to an award.  and conditions.  General Terms and Conditions.  01 NCACO 05B .0301.  Additionally, RFPS or IFBs may be used fori informal purchases. Agencies, community colleges, and universities may advertise these solicitations on the NC eProcurement system. Where the cumulative value ofa a procurement, including all extensions and renewals, involves an expenditure of public funds exceeding an agency's general delegation ora university's bid value benchmark, and the subject matter is not otherwise covered by an STC, the purchasing agency shall comply with the following procedures, unless otherwise  4.4.3 Formal Purchases  exempted:  Competition shall be solicited utilizing sealed bidding.  Standard solicitation documents that include standard language, including the North Carolina General Terms and Conditions issued by P&C: shall be used.  Prior approval from P&C must be received for proposed changes to standard language. Any modifications shall not conflict with P&C's North Carolina General Terms and Conditions. All deviations must receive prior P&C approval.  The purchasing agency shall prepare and advertise the procurement. P&C must review and approve all solicitations prior to posting.  Solicitations shall be advertised in NC eProcurement for a minimum of 10 calendar Agencies may also advertise solicitations on their websites or disseminate via email or other means, to further encourage competition. The purchasing agency will conduct the evaluation and send the award  days.  recommendation to P&C.  Page 49  NC*DOA Administratio    P&C must review and approve the award prior to moving forward with the  selected vendor. 01 NCAC 05B. .0301.  4.4.4 Email, Fax, or Telephone Bids  When sealed bids are required, offers may not be sent by email, fax, or telephone. Sealed offers are required for the procurement of goods and services that exceed an agency's general delegation or a university's bid value benchmark. 01 NCAC 05B. .0301. 4.5 Preparation of Solicitation Document  The solicitation document is the key document in any procurement. It conveys critical information regarding the who, what, where, when, why, and how of a solicitation. The solicitation document must contain all oft thei information vendors need to accurately Atar minimum, the following information shall be included in the solicitation:  respond to the state's request in at timely manner.  Specifications, requirements, terms and conditions, and delivery information  Agency name Buyer name Buyer contact information Solicitation identification number Title (a short description oft the good or service) Opening date, time, and location (street address, office, room number) Additional information required by the solicitation  01 NCAC 05B. .0314.  Ifthe solicitation includes a conference or site visit for potential vendors to attend, this information shall also bet furnished with the advertisement, to include:  Mandatory or non-mandatory, attendance Date, time, and location Contact persons and phone number  Other requirements, such as number of attendees allowed, preregistration requirements, and virtual conference access information, if relevant  4.5.1 References  The state may require that vendors responding to a solicitation provide al list of past customers forwhich they provided similar goods or services as those sought in the solicitation. The state may contact these references to determine bid acceptability and may  Page 50  NC*DOA    considert this information in the evaluation. The solicitation document should indicate  whether references will be considered in the evaluation.  4.6 Insurance Coverage  Providing and maintaining adequate insurance coverage is a material obligation oft the vendor under the contract. Vendors shall be responsible for providing and maintaining commercial insurance, oft the type and amount listed below. The default insurance coverage requirements vary based on contract value, as reflected below and int the North Carolina The required coverage amounts listed below are minimums, which may be increased where there is al high risk of loss based ont the subject matter oft the contract. Any modification of the required insurance coverage should be based on a risk assessment and documented in the official procurement file. A risk assessment template is available from P&C fort this purpose. The increased amounts should be provided int the solicitation document, sO vendors are aware oft the requirements. The insurance coverages provided fori ini the North Carolina General Terms and Conditions are not exhaustive, and other types of coverage may be needed for a specific procurement, such as cyber insurance or E&O coverage. The solicitation document should include any additional types of coverage required. Buyers may request proofofinsurance coverage from the vendor prior to contract award.  General Terms and Conditions.  Minimum Coverage ($)  Contract Value Worke'sCompensation  Commercial General Liability As required by North Carolina law  EmployersLiability As required by North Carolina law  Automobile Liability Asre required for risks involved int the procurement Bodily Injury and Property Damage $250,000 Un/Underinsured $250,000 Medical Payment Bodily Injury and Property Damage $500,000 Un/Underinsured $500,000 Medical Payment  Small Purchase  More than Small Purchase, butl less than $1 million  $250,000.00  $500,000.00  $2,500  Greater than $1 million  $500,000.00  $1 million  $5,000  Page 51  NC*DOA    Section 5: Competitive Sealed Bidding 5.1 Overview of Competitive Sealed Bidding  Competitive sealed bidding is required where the total expenditure for goods and services exceeds an agency's general delegation. 01 NCAC 05B. .0301. For all procurements that exceed an agency's general delegation, sealed offers are solicited by the using agency. P&C must review and approve the solicitation prior to posting and prior to award.  5.2 Advertising Solicitations  Agencies shall advertise formal solicitations that exceed their general delegation via the NC eProcurement system. When advertisement is required, agencies shall advertise the solicitation for a minimum oft ten calendar days prior to the designated bid opening date. 01 NCAC 05B .0316. This rule does not prevent the supplemental solicitation of offers by other means, including direct mailings, phone calls, or agency advertisement, to encourage  competition.  5.3 Solicitation Addenda  Addenda should be issued when it is necessary to make changes to the solicitation that will be applicable to all bidders, such as extending the bid opening or modifying bid submission requirements. Addenda shall also be prepared as necessary to respond to questions received from potential vendors during the question-and-answer period. The details about the question-and-answer period should be provided in the solicitation Mandatory- Mandatory addenda must be signed and returned with the vendor's bid submission in order for the vendor to be considered responsive and further eligible for Non-mandatory- - Non-mandatory addenda do not need to be returned by the vendor The addenda shall indicate whether iti is mandatory and must be executed and submitted with the vendor's response to the solicitation. Any addenda issued shall be posted in the NC eProcurement system using the same procedures as the original solicitation posting. Bids and proposals shall be opened publicly at the location, date, and time listed ini the solicitation document. Only those responses that are received by the deadline shall be Att the time of bid opening, bidder names, manufacturer information, model numbers of offered items, delivery timeframes, and pricing that is not subject to negotiation or two-step opening shall be announced to vendors and other persons attending the opening. This includes all timely bids received, including those that may later be deemed non-responsive.  document. There are two types of addenda that can be issued:  award.  and do not affect vendor responsiveness.  5.4 Bid Opening  opened and may bei further considered for award.  Page 52  NC*DOA    Late bids are not opened. Ifr negotiation is anticipated, pricing may not be made public until  award. 01 NCACO5B. .0503.  5.4.1 Bid Opening Procedures  Iti is important to record the bid opening results to bet transparent about the process. Where 1) Bids shall be received prior to the bid opening date and time specified int the 2) Atl least two purchasing agency employees shall attend the bid opening to satisfy the 3) Bid openings shall occur at the location, date, andi time specified in the solicitation. 4) All vendors in attendance shall sign the attendance sheet, indicating which party or  sealed bidding is required, the following process should be followed: solicitation. Late bids shall not be opened or considered. witness requirement. 01 NCAC 05B .0305(a).  parties they represent. list of attendees.  a). Ifal bid opening is held virtually, use a screenshot or other method to capture a 5) Ensure vendors understand that they shall not contact anyone other than the listed 6) Explain to attendees the evaluation process and that the only information that will be  contact on the solicitation during the evaluation period.  shared publicly at this time is: Bidder names Manufacturer/Make Model number Delivery timeframe  Pricing (unless negotiation is anticipated)  7) Agencies shall not comment about addenda received or not received unless the pricing, make, model, or delivery has been changed through an addendum. 8) Ensure vendors know how to access bid tabulations in the Interactive Purchasing 9) Atabulation of vendors responding to the solicitation shall be prepared. 10)Tabulations should be posted int the IPS as soon as practical. Do not post pricing until  System (IPS).  after award if negotiating.  5.4.1.1 One-Step or Two-Step Opening  Bid openings may be conducted as either a one-step or two-step process. The process required depends on the type ofs solicitation document used and the method of evaluation. The evaluation criteria and bid opening method must bei included ini the solicitation  document.  One-Step (IFBs or RFPs): The vendor submits one: sealed package.. At the date and time specified int the solicitation, bids from each responding vendor willl be opened  Page 53  NC*DOA DwoatmantfAdnastato    publicly, and the name oft the vendor and costs offered willl be announced. If negotiation is anticipated, pricing may not be made public until award. Two-Step (RFPs): The vendor submits two sealed packages containing (1)the technical proposal and (2) the cost proposal. Att the date and time specified ini the solicitation, technical proposals from each responding vendor willl be publicly opened and the name of each vendor announced publicly. A notation will also be made indicating whether a separate sealed cost proposal has been received. Cost proposals will be placed in safekeeping until publicly opened at a later date. Vendors shall be given at least two working days advanced notice oft the date and  01 NCAC05B.0503  time for the public opening of cost proposals. 5.4.2 Withdrawn, Void, or Recalled Offers  A "withdrawn bid" is al bid that is rescinded by the vendor prior to the bid opening. 01 NCAC 05A. .0112(46). Vendors, or their authorized agents, may withdraw offers in writing. Withdrawn offers should remain unopened in the bid file along with the withdrawal letter. Purchasers do not need to notify the SPO of withdrawal requests made prior to bid A"voided bid" is an electronic bid that was submitted by a vendor in connection with an electronic solicitation that has been cancelled, leaving the bids voided and not opened A "recalled bid" is al bid that is rescinded by the vendor after the bid opening but prior to a contract being awarded. Recalls should be requested in writing after bids are opened.  opening.  electronically. 01 NCAC 05A. 0112(44).  When a vendor seeks to recall its bid, purchasers shall:  Review the reasons given for any recall request to ensure that allowing the recall Inform the SPO oft the reason for the request and whether it was allowed  would not compromise the procurement process  5.4.3 Late Offers  Bidders are: solely responsible for having their offer delivered at the correct date, time, and location, regardless of delivery method. Late offers or modifications shall not be accepted unless the agency personnel involved ini the solicitation are directly responsible fori the  delay.  5.4.4 Bid Tabulation Once the bid opening has occurred the purchaser must create at tabulation oft the publicly available information and post it in the IPS. Tabulations are normally available int the IPS within one working day after opening. 01  NOTE:  Lengthy tabulations may not be available in the IPS. Requests for tabulations or tabulation information (such as pricing) that is not publicly available cannot be honored until after award.  NCAC05B.0305  Page 54  NC*DOA    5.5 Legal Review Thresholds  To ensure that contracts are legally sound and to protect the state from unnecessary risk, legal review of solicitations may be required. State law provides for legal review under certain circumstances. In addition to changes in standard terms and conditions or other triggers that may be addressed int this manual, legal review is required for:  Contracts exceeding $1 million  Non-competed contracts exceeding $5 million  Legal counsel should be included ini the solicitation as early as practical. P&C will not approve award recommendations until any required legal review is complete. The State Purchasing Officeri interprets contract value to include all potential extensions and renewals. Thus, the value of the contract is the cumulative total amount for which an agency  iss seeking approval to spend under the contract. 5.5.1 Contracts Exceeding $1 Million  All contracts that cumulatively are expected to exceed $1 million shall be reviewed by the Contract Management Section (CMS) before P&C will approve the award recommendation. Statewide Term Contracts (STCs) exceeding $1 million awarded by P&C also must be reviewed. There are no exceptions to this requirement. G.S. 143-50.1. Some entities are exempt from CMS review. Most notably, university general counsel shall review contracts that exceed $1 million. G.S. 114-8.3(b). Entities claiming an exemption from CMS review: shall provide a citation that supports the exemption. Pursuant to G.S. 114-8.3(c), all state entities and universities are required to report to P&C when they intend to enter into a contract expected to exceed $1 million for record keeping purposes, regardless of whether they are exempt from CMS or P&C review. P&CI has developed an e-form fori this purpose. Contracts that are processed through P&C's electronic bid system do not have to be separately reported through the e-form. 5.5.2 Non-Competed Contracts Exceeding $5 Million Proposed non-competed contracts for goods or services estimated  to exceed $5 million shall be reviewed by the Attorney General (AG) NOTE: Agencies shall The AG's checklist and certification shall be completed before final contract value.  or their designee prior to contract award. contract approval. G.S. 143-49(3a).  seek approval for total  Section 6: Evaluations and Negotiations  The evaluation method and criteria are critical to the procurement process. They should be tailored to each specific procurement and be included ini the solicitation document. The evaluation method and criteria dictate how vendor responses to a solicitation will be evaluated and a vendor selected for award. When developing the evaluation sections ofa  Page 55  NC*DOA rtment fAdministration    solicitation, consider how the responses willl be assessed in ai fair and consistent manner and ensure that the resulting contract will be int the best interest oft the state. Only offers deemed responsive aftert the completed administrative review can be considered for evaluation and award. Prior to evaluations, iti is essential to ensure that both the offer and the vendor are eligible for award. This involves assessment ofv whether the offeri is responsive, and not debarred, prior to evaluation. After vendor selection, in certain circumstances, negotiation may be needed to secure better pricing or finalize the terms and  conditions oft the contract.  6.1 Determining Responsiveness  Before the evaluation can proceed, each offer received must be reviewed to determine whetheri iti is responsive before it can be further considered for award. 01 NCAC 05A. 0112(28). A "responsive" offeri is an offer that meets all of the requirements of bid submission, such as bid execution, submittal of all required information and completed attachments; and receipt by the bid submission deadline. Bids with material deficiencies are non-responsive and cannot be considered for award. For example, failure to submit pricing or at technical approach is a material deficiency, since the response cannot be properly evaluated. Submission of a response with material deficiencies cannot be cured by clarification. 01 NCAC 05A.0112(6), 05B .0307, 05B.0309(c). An issue with a response that does not create a material issue, such as a vendor providing two copies of its bid instead of three, can be waived as a minori informality or technicality. In certain instances where all responsive vendors have made the same material mistake, that Examples of omissions that would result in a vendor being deemed non-responsive:  requirement may! be waived for all vendors.  Failure to provide required references Failure to sign the bid or proposal Failure to complete all required attachments Failure to return all mandatory addenda Failure to submit pricing  Failure to attend a mandatory site visit or conference Failure to meet delivery requirements Late bid submission  Non-responsive vendors may not be evaluated or considered for award, sO responsiveness  must be determined prior to evaluation. 6.1.1 Signed Bid create a binding contract.  All received bids must be signed (executed) by the vendor to be accepted for consideration. A: signature indicating that the document is the vendor's offeri is necessary to  Page 56  NC*DOA fAdministratic    Inc certain instances, a vendor will include a signed cover letter that reflects that the vendor intends to be bound by thei terms oft the solicitation document. Depending on the specific language oft the cover page, the signed cover page may be able to replace the signed solicitation execution page. Specific cover letter language is required fort this substitution. Consult legal counsel to determine whether a signed cover page can stand in lieu oft the  signed solicitation document.  6.2 Determining Responsibility  Ina addition to submitting a responsive offer, a vendor must be responsible to be eligible for award. A "responsible" vendor is one who is able to satisfactorily perform the work. A contract may not be awarded to a vendor ift that vendor is not responsible. A vendori is determined to be responsible by reviewing the information they provided in response to the solicitation to see ifthey! have the capacity to perform the technical and contractual requirements of the contract. For example, the certification off financial condition orotheri financial documents may demonstrate a vendor's responsibility. Debarred vendors are not entitled to enter into contracts with the state. 01 NCAC 05B.1520. It is critical to check whether a potential vendor is listed on the state's debarred vendor list before they are selected for award. Ifa solicitation is funded by federal grants, consulting the federal debarred vendor list may also be required. 6.4 Confidentiality During Evaluation  6.3 Debarred Vendors  During the period ofe evaluation and prior to award, only the information provided in the posted bid tabulation is public record. Ifr negotiation is anticipated, pricing does not need to be posted in the bid tabulation and may not be available until after award. Access to information about specific offers, including any accompanying information submitted with the offers, shall be limited to persons in the agency who are responsible for handling the bid evaluation and contract award. Vendor participation ini the evaluation process shall not be permitted. Issuing agencies should limit vendor communications to After award oft the contract or when the need for the item or service is canceled, the complete file shall be available to any interested party with the exception of confidential  those necessary to clarify offers or engage in negotiations.  information.  6.5 Evaluation Methods and Criteria  Responsive vendors shall be evaluated to determine and document which offeri is the most advantageous to the state based on the evaluation method and criteria int the solicitation document. The evaluation criteria define the selection process and how offers will be evaluated and awarded. When appropriate, they also provide for value analysis in selecting the most advantageous proposal by considering other factors besides price, such as  Page 57  NC*DOA rtment    performance history, experience, technical approach, and other related factors. Contracts are awarded based on what is most advantageous tot the state. Evaluations may be based on either cost, numerical weighting, or narrative trade-off. Whichever approach is used, the evaluation must be thoroughly documented and included int the official file. All responsive offers shall be considered for award. All evaluation factors and criteria and their relative importance must be stated clearly in the solicitation document. Unless the solicitation provides otherwise, the relative importance is determined by the order in which the factors are listed. Specific percentages fori the weight ofeach factor are not required, but ifused, must be disclosed int the solicitation document. Relative strengths, deficiencies, weaknesses, and risks supporting the evaluation must be documented for each vendor and saved ini the procurement file. The evaluation team shall determine the final ranking of all offers under consideration using onlyt the criteria set forth int the solicitation document. All vendors are ranked from most advantageous to least advantageous to the state. Only criteria listed int the solicitation shall be considered int the  evaluation and cannot change during the evaluation phase. The following evaluation methods may be used when appropriate:  Lowest Price Technically Acceptable Typically used with an IFB  Awards shall be made toi the responsive and responsible vendor with the lowest price whose bid meets the specifications oft the solicitation.  Best' Value  Typically used with an RFP  Specific criteria define how offers are evaluated and awarded. Provide value analysis for selecting the most advantageous proposal factors beyond price. Stated criteria may include past performance, qualifications; experience, staffing plans, proposed technical approach, and other related  factors.  6.5.1 Lowest Price Technically Acceptable  Ifthe lowest price method is used, award must be made tot the responsive and responsible vendor with the lowest price, ift the bid meets the specifications of the solicitation (i.e., is technically acceptable). Trade-offs between price and performance are not allowed. Clarifications and vendor negotiations may be used with this method of award.  6.5.2 Best Value  The intent of Best Value procurement is to enable vendors to offer, and the agency to select, the most appropriate solution to meet the business objectives defined in the solicitation and to keep all parties focused on the desired outcome of the procurement Best Value evaluations are governed by G.S. 143-52(a) and 143-135.9.  rather than price.  Page 58  NC*DOA Administratic    The following information describes the Best' Value procurement methodology: 1) Acommittee evaluates offers in accordance with the stated evaluation factorsto determine which proposal offers the best trade-off between price and performance. 2) Specific evaluation criteria are provided int the solicitation document. The evaluation may only consider those factors and the statutory factors ini the evaluation for award. 3) Fors solicitations that use Best Value evaluation, vendor scoring and ranking must be determined by using consistent rating methodologies, such as narrative, qualitative, 4) The evaluation team must identify the strengths, deficiencies, weaknesses, and risks supporting the evaluation and document them in the procurement file. 5) Evaluation committees shall use only solicitation criteria to determine final ranks of offers, from most advantageous to least advantageous to the state. Narrative evaluations assess the strengths ofa an offer, and how they support the business objective, and the weaknesses and/or risks, and how they may implicate the business objective. The resulting, justification of which offer is most advantageous to the state  quantitative, or numerical rankings.  shall be done by consensus ofthe committee.  6.5.2.1 Example Evaluation Criteria  Selection of appropriate evaluation criteria is a critical component oft the solicitation document. It defines the selection process and guides how offers will be evaluated and awarded. It also provides for value analysis in selecting the most advantageous proposal by considering other factors besides price, such as past pertormance history, qualifications,  experience, and technical approach used in the proposal.  Common evaluation criteria include:  Cost  Delivery and implementation: schedules Conformity with the specifications Vendor experience Technical approach Staffing plan  Iffinancial information will be evaluated, the solicitation document must state the requirement and inform the vendor of what documentation must be submitted. The vendor's financial information, statements, and/or documents submitted with its response  shall be evaluated to determine whether the vendor: 1) Has sufficient ability to perform the contract  2) Isable to meet its short-term obligations, debts, liabilities, payroll, and expenses 3) Has provided complete, reliable, and accurate financial information regarding its  business operation  Page 59  NC*DOA Administration    4) Isfi financially solvent from the state  5) Has sufficient cash flow and/or available financing from a financial institution to perform the proposed contract for an extended period without receiving payment Clarifications or negotiations may be conducted with the vendor after receipt of offers as appropriate. Int those cases where negotiation is required, Best and Final Offers (BAFOs) may be needed to memorialize negotiated changes to the initial offer.  6.5.2.2 Narrative Evaluation  Anarrative process of evaluation implementing the factors in G.S. 143-52 and the incorporated Best' Value statute (G.S. 143-135.9) lists the evaluation criteria from the solicitation and the strengths and weaknesses of a vendor's proposal relative to those factors and the specifications of the solicitation, while giving priority to those factors weighted more highly. The evaluation should discuss each vendor's strengths or weaknesses relative to the evaluation criteria. The evaluation should never include any Extensively listing strengths and weaknesses of vendors in at table and then concluding without discussion that a particular vendor should receive the award is subject to protest. As such, the use oft the narrative evaluation requires a written explanation of the strengths and weaknesses of each proposal and a subsequent justification of whyt the recommended awardee provides the Best' Value to the state. Many narrative evaluations fail to connect the dots and explain the conclusion reached after evaluation oft the award criteria. Ifusing a narrative evaluation process, the evaluation committee should come to decision by consensus and be clear in its written evaluation about the basis for its evaluation and decision. Arguably, a clear and well-written narrative evaluation that has a rational basis should have an advantage over a numerical evaluation in any legal challenge to the award. A numerical evaluation shall be based on measurable and objective criteria. The weight value and scoring methodology must be spelled outi in the solicitation document. The results oft the evaluation shall be in writing and preserved as a public record after award, which shall include individual scores from each evaluation team member or consensus scores agreed to by the team as a whole. Cost should be weighted and scored, as well as technical approach, qualifications, resources, experience, and any other criteria identified. Vendors are ranked from most advantageous to least advantageous to the state. Evaluations shall be based on measurable and objective criteria. The solicitation document shall clearly identify weight value and scoring methodology, though these values may vary between solicitations. Scoring values are not standardized and can be developed as needed to maintain well-defined, fair, and equally measured evaluation criteria. An Offers are ranked using the evaluation factors and their relative importance or weight as defined in the solicitation document. The relative overall ranking of any offer may be adjusted up or down when considered with, or traded-off against, other non-price factors.  opinions or feelings.  6.5.2.3 Numerical Evaluation  evaluation scoring example is below.  Page 60  NC*DOA Department ofAdministratic    For example, an offer with the lowest price would normally receive the best ranking ini the price evaluation category. However, if other non-price evaluation factors received low rankings, the overall ranking of the offer would be reduced. Clarifications and negotiations  are allowed, as needed.  Example of a Numerical Evaluation Evaluation Factors  Maximum Possible Score  Cost Technical  40  Corporate Background & 40 Experience Technical Approach  20 40 60 100  Cost Proposal Points  Maximum Technical Proposal Points Maximum Cost + Technical Proposal Score  The cost evaluation is calculated based ont the lowest cost receiving the maximum points. The next ranking vendor(s) will receive a percentage of the maximum points, based on the Weighted evaluations can be scored and derived either by consensus ori individually. Ditferences between consensus and individual evaluations are described below. Weighted evaluations should be supported with an explanation of the point distribution.  formula:  vendor lowest cost/ /vendor cost  Consensus Recommended method) Evaluators reach one score collaboratively.  Individual  Evaluators reach scores independently and then average. Increases potential for scoring discrepancies Makes scheduling more convenient  Eliminates scoring discrepancies Reduces protests Average does not equal consensus.  6.6 Two-Step Competitive Sealed Bidding  Two-step competitive sealed bidding separates the technical evaluation from the cost evaluation. Under a two-step process, technical and cost proposals are submitted separately, although both must be received by the bid deadline. Solicitations must give notice that each component oft the response must be distinct and must not include  information relevant to the other:  The technical proposal shall not contain cost information.  Page 61  NC*DOA upartment ofAdministration    The cost proposal shall not contain technical information.  Each proposal shall be dated and signed by an authorized official. Unsigned proposals may  be rejected. Step 1 evaluated. Step 2  Technical proposals are opened and evaluated first. Cost proposals are held in safekeeping but are not opened and do not become public record until the technical offers have been  Ifay vendor's technical proposal was accepted, their cost proposal may be opened. Vendor Agencies shall notify bidders at least two working days prior to the cost opening. Technical and cost proposals shall be opened publicly with accepted bidders ati the date, time, and  names and prices are then tabulated. location specified int the solicitation. 6.7 Posting Bid Tabulations  A bid tabulation should be posted ini the Interactive Purchasing System (IPS) within one business day of the bid opening. The tabulation should list, at a minimum, the names oft the vendors that submitted a response. The tabulation should also include the make and model oft the item offered and the delivery time where appropriate. If negotiation is anticipated, the pricing is noti included as part of preliminary tabulation but is included in the final Non-NC eProcurement users' tabulations cannot be posted ini the IPS withouti inserting a dollar amount. For the preliminary tabulation orf fora ai two-step RFP, one dollar should be Ifthe' lamounts bid" is not adaptable to being summarized, or ifas summary would be misleading, a manual tabulation shall be prepared upon request and indicated in the  tabulation once an award is made. listed as a placeholder.  comment section oft the IPS tabulation.  6.8 Communications with Vendors  During evaluation, communications with vendors should be limited. Agencies may clarify offers or negotiate with vendors after offers are received. BAFOS shall be signed to Evaluators may request oral presentations or discussion with vendors to clarify the offers  document the contract changes resulting from negotiations.  received. 6.9 Tie Bids  When the evaluation oft two or more competitive solicitation responses results in a tie, the awarded vendor shall be selected by coin toss. Coin tosses shall be witnessed and  Page 62  NC*DOA artment Administration    documented ini the procurement file by managers or other high-ranking agency  administrators.  6.10 Basis for Rejecting Offers  Vendor offers may be rejected in part or whole. Bases for rejection may include: When the offer does not meet the specifications in the solicitation regarding When the offer does not comply with the requirements set forth in the solicitation When the purchasing agency determines there is al lack of competition Cancellation or changes int the intended project or other determination that the Dual or similar offers which prevent a Best Value procurement to be determined Any determination that rejecting offers is in the best interest oft the state  quantity, quality, delivery, price, or service  document  When the solicitation contains errors proposed requirement is no longer needed Limitation orl lack of available funds  01 NCAC05B.0501. 6.11 Negotiation  Negotiations between the state and potential vendors aim to achieve mutually satisfactory objectives and benefits and to reconcile differences on pricing and contract terms and conditions. 01 NACA05B. .0112. Negotiations are conducted with vendors to allow for Agencies may negotiate with one or more responsive vendors or reject all offers and negotiate with one or more sources ofs supply that may be capable of satisfying the requirement. Negotiations may also be conducted with suppliers who merit a waiver of Negotiations shall be conducted by the agencyift the procurement is valued less than its general delegation. Appropriate assistance may be sought from agency or P&CI legal resources, depending on contract value and any relevant general delegation, special delegation, or exemption. Additional terms and conditions may be needed for specific Offers and counteroffers may be made as necessary with each vendor to secure mutually agreeable contracts. After negotiations, the state will select the vendor(s) with the most advantageous proposal. Vendors shall submit written confirmation of modifications and final terms and conditions oft the proposal. BAFO documents shall be used to document changes made through negotiation unless, for instance, a revised RFQ is issued after  modifications to the terms and conditions, the pricing, or both.  competition. 01 NCAC05B .0503.  procurements and should be part of negotiations as needed.  negotiation.  Page 63  NC*DOA    6.12 Negotiation Tips and Guidelines on the tactics to use in achieving that objective. process to the desired outcome. These typicallyinclude: What are the issues to be negotiated?  Successful negotiation is based on knowing the objective oft the negotiation and deciding Negotiation plans for internal reference should be made beforehand and should guide the  What terms or modifications is the state not able to accept? What specific outcome is desired on each issue? What is the least acceptable outcome? Why is the state seeking the change?  What issues are deal-breakers if negotiations are not successtul?  This should persuade vendors to agree but does not necessarily disclose all  aspects of the state's situation, motivation, or needs.  Do  Dol Not Discuss other proposals Be unreasonable or unfair Negotiate beyond the scope of vendor's proposal  Avoid arguments and interruptions Be ethical, fair, and firm Bev well-prepared Be open to discuss alternatives Attempt to reach a "win-win"  result  6.13 Award Recommendation  Once evaluations and negotiations have been completed with one or more: selected vendors, the agency must prepare a written narrative summarizing the rationale fori the selected offer as well as the reasons for non-selection of offers. 01 NCAC05B .0309. The summary shall address the merits oft the offer relative to the solicitation document and shall address positive or negative attributes as well as weak or non-supportive factors. When numerical points and/or percentages are used int the solicitation document, numerical and/or percentage criteria must be used int the evaluation exactly as noted in the solicitation document. Often each criterion is weighted, giving certain areas oft the criteria more value relative to the award determination. Be sure that the final scores correctly reflect that  weighting.  Page 64  NC*DOA    6.14 Partial and Multiple Awards  Unless otherwise stated int the solicitation, partial, progressive, orr multiple awards may be  made:  Due to insufficient funds As ar result of legislative mandates  Where iti is advantageous to award separately by items  Where more than one vendor is needed to provide the contemplated requirements  as to:  Quantity Quality Delivery Services Geographical areas  Some term contracts require making an award to more than one vendor. This shall be limited to the number of vendors needed to reasonably satisfy the contract requirements. Care should be exercised to protect the character and principles of competition. GS143-  52.3.  6.15 Notification of Award  Awarded vendors shall be notified of contract award. Ift the solicitation was advertised on P&C's electronic bid system, an award notice shall be posted there as well. Posted award notices shall identify the contract and award information, awarded vendors, and pricing. Award notifications shall be posted tot the electronic bid system within three calendar days ofa award or within one day after execution oft the contract, whichever is later.  Section 7: Post-Award 7.1 Notices to Vendor  Once bid evaluations are complete and a vendor has been selected, thei issuing agency should notify the selected vendor(s) of contract award. This notification should be provided prior to issuance of a purchase order. For competitive sealed bidding, award information 7.2 Release of Confidential Information After Award Alli information and documentation relative to the development of a solicitation document fora a proposed procurement or contract shall be deemed confidential in nature, except as deemed necessary by the purchaser to develop a complete contractual document. Such  shall be posted publicly to the NC eProcurement System.  Page 65  NC*DOA    material shall remain confidential until the award ofa a contract or until the need for the This confidentiality requirement includes all information and documentation relative to the development ofa a specification until the adoption of that specification or award ofa After contracts are awarded, or when there is no longer a need for the good or service, complete files shall become public record and made available to interested parties, with the exception oft trade secrets or other information a vendor appropriately deemed confidential As a condition to confidential treatment, each page oft the vendor's response containing trade secret information shall be identified in! boldface at the top and bottom as CONFIDENTIAL' by the vendor, with specifictrade secret information enclosed in boxes, marked in a distinctive color or by similar indication. Cost information shall not be deemed confidential under any circumstances. Regardless of what a vendor may label as a trade secret, the determination of whether certain information is ori is not entitled to protection is Confidential information must be redacted if documents are produced in response to a  procurement no longer exists. contract, whichever is later.  in its response. 01 NCAC 05B .0103, G.S. 132-1.2.  determined in accordance with G.S. 132-1.2.  public records request.  7.3 Review of Services for Acceptance  Agencies shall ensure that services comply with applicable codes, statutes, local ordinances, policies, and safety requirements. Agencies shall compare actual performance against performance measures, goals, deliverables, and objectives to determine whether all required work has been completed. Performance should be considered complete when the services are approved as acceptable by the agency Contract Manager or Project Manager  unless otherwise stated in the contract.  7.4 Review of Goods for Acceptance  Receiving is the act ofta taking possession andi inspecting goods for acceptance based on the specifications oft the solicitation document. When goods are received from a vendori itis important that they are reviewed to ensure compliance with the contract and the purchase order and to confirm that the goods are not damaged. Goods shall be inspected at the time of receipt and compared against the packing slip, if possible. Prompt acceptance of goods received is important to prevent any vendor claims that goods were "deemed accepted" by F.O.B. destination should be required in the solicitation document, sO the risk of loss or Ifall the specifications of the order are met and no damages are found, the item is received. All packing slips and any necessary paperwork should then be submittedi to the proper  the state without actual inspection and acceptance by the agency. damage to the goods will not pass to the state until delivery.  agency division so the invoice can be paid.  Page 66  NC*DOA ofAdministration    When damages or discrepancies are discovered, the vendor is to be immediately notified with specifici information oft the discrepancy. Damage should be documented by a dated photograph. Partial shipments shall be documented and raised with the vendor  immediately upon discovery. 7.4.1 Inspection and Testing  Agencies should inspect and test goods promptly upon receipt consistent with the  following:  Agencies shall inspect goods upon delivery to ensure compliance with contract Agencies may authorize revisions and cost adjustments as needed after inspections are completed to account for discrepancies in quantity, quality, or deviations from the specifications. If an increase in cost results in the total contract value exceeding the agency's delegation, then prior approval from P&C is required. Agencies shall ensure that goods comply with applicable codes, statutes, local Agencies shall contact vendors about delivered products that fail to meet contract specifications or requirements and document these communications in the  requirements and specifications.  ordinances, policies, and safety requirements.  procurement file. 7.4.2 Damaged Goods  Agency processes may be delayed if damaged goods are received. Sometimes damages are not discovered until packaging is opened, items are installed, or equipment is puti into service. Vendors shall be notified as soon as damage is discovered and potential impacts Purchasing agents should determine where a subsequent damage claim is to be filed based ont the terms specified in the contract or purchase order. Vendors should be notified ofany  onthe agency are documented.  potential impacts the agency may incur due to the damaged goods.  7.4.3 Inaccurate Orders  When a discrepancy in part number(s) and/or products occurs, vendors may be placed in default ifj justified by the contractterms. Vendors should be notified immediately of order discrepancies, sO they are afforded the ability to timely resolve these issues. Inaccurate orders often create inaccurate invoices that compound the problem and ultimately require a meeting between the purchasing agent and the vendor to discuss vendor performance. Purchasing agents may counsel vendors with multiple order discrepancies on howi the vendor plans to improve its performance sO they may be eligible  for future contracts.  Page 67  NC*DOA    7.4.4 Inaccurate Quantities  Purchasing agents should resolve inaccurate quantities with vendors by either obtaining Receiving departments should notify purchasing agents oft the nature and type of quantity  credit or replacement of goods that were shorted from shipment.  discrepancies which may include: Too many/too few items  Shipping the wrong part number or wrong manufacturer part  Case quantities instead oft the amount ordered, e.g., reams of paper versus cases of paper. Buyers should document this fori future reference when ordering this same  item.  7.4.5 Late Shipments  When shipments are late, purchasing agents should:  Document late shipments  Issue a' Vendor Complaint Form, if necessary, sot further action can be taken Determine if liquidated damages apply based on the language oft the contract Discuss issues with vendors that have multiple late shipments to identify root causes ofc delays and determine how the vendor can correct the issue moving forward  7.5 Contract Closeout Checklist  Itist the responsibility ofe each Agency Contract Administrator to ensure that the work under the contract has been completed prior tot final payment. Once that has been determined, agencies should perform contract closeout processes. The purpose is to verify that both parties to the contract have fulfilled their contractual obligations and there are no responsibilities remaining. In addition, contract closeout is the time to assess the success of the contract and determine ift there are any lessons learned fort future contracting. The contract closeout file should contain all necessary documentation relative to the agreement at the time of closeout. Contracts with active warranties shall not be closed out or receive final contract performance reviews until the warranty expires. With the exception of ongoing warranties, final payment should never be made until all work is complete and  all deliverables are received and accepted. A contract is ready for closeout when:  1) All goods and services have been received, completed, and accepted by the agency. 2) All deliverables, including reports, have been delivered and accepted by the agency. Contract administrators should compare actual performance against performance measures, goals, and objectives to determine whether all required work has been  completed.  3) All monitoring issues have been resolved.  Page 68  NC*DOA Admini    4) Vendor performance has been evaluated by comparing work completed against 5) Final acceptance from the Project Manager has been received (ifa applicable). 6) Vendor is aware of and in compliance with records retention requirements and a plan 7) Any deficiencies found as part oft the closeout process are documented, and resolved,  contract goals and objectives.  has been developed for contract file maintenance.  ifpossible.  8) Final payment has been made.  Inp practice, many contracts cannot be closed out after the date the above items are all completed, because the warranty period is effective well beyond such date. Therefore, the contractor may not have "satisfactorily performed all required contractual obligations" until the end oft the warranty period. Furthermore, sometimes even at that point the contract cannot be fully closed out because it may, for example, require the contractor to have repair Itisre recommended that agencies have a closeout process for contracts that allow sufficient time toi finalize closeout procedures including completion of alli final obligations and issuance of payments. Good contract management and administrative procedures require that contracts be closed out and filed, not open or unresolved for an extended amount of  parts available for years after contract award.  time beyond the expiration date. 7.6 Performance and Default  When performance issues arise in a contract, they should be resolved at the lowest possible level to have the performance remedied quickly and satisfactorily. If one or more material issues are not resolved, the contracting agency may find a vendori in default of contract for failing to perform in accordance with the contract requirements and terms and conditions. The state has several documents frequently used to document performance issues and  exercise contract default clauses:  Requests to Cure are utilized to issue ai formal complaint regarding the performance ofa a vendor, to document vendor performance failures, and to obtain a response from the vendor on how they will prevent the issue from reoccurring. Notice of Default and Request to Cure letters are utilized to provide formal notice to avendor that they are in default ofa a provision in a contract and require the vendor to cure that default within a specified timeframe ori their contract willl be terminated Notice of Termination and Remedies letters are utilized to provide formal notice toa vendor that they are being held in default under the contract and that the contracti is being terminated. The letter may also advise the vendor oft the remedy being sought, such as the additional cost of obtaining substitute goods or services. For goods purchases, agencies may immediately purchase replacement goods on the open market and charge those expenses to vendors who are found in default forf failing to  for cause.  perform in accordance with the contract's terms. G.S. 25-2-712.  Page 69  NC*DOA ofAdministr    7.7 Debarred Vendors  Debarment means a vendor shall not be entitled to enter into a contract for goods or services, shall be placed on a debarred vendor list, and shall be removed from any distribution lists which may be utilized by P&C. 01 NCAC05B.1520. Vendors may only be debarred in limited circumstances, such as:  9) Pursuant to G.S. 143-59.2, ifthe vendor or any officer, director, or owner is convicted ofa any violation under G.S.78A, the Securities Act of 1933 or the Securities Exchange 10)Byt the SPO upon finding of fraud, misrepresentation, or other deceptive acts or practices while doing business with a state agency, found during an audit by the state auditor in accordance with G.S. 147-6 64.6(c/21)or found after an internal audit by an a) After a finding by the state auditor ori internal auditor, the SPO's determination  Act of 1934  internal auditor in accordance with G.S. 143-746(f).  to debar a vendor shall be based ont the following factors:  .7 The severity oft the conduct identified int the findings and any recommended actions by the state auditor or internal auditor ii. The vendor's history of performance on one or more contracts  11)Fori failure to pay required eProcurement fees 7.8 Contract Renewals and Extensions  Contracts may need to continue after the expiration oft the initial contract term. Contract renewals and extensions allow for contract performance to continue under the same terms The agency must consider and document the factors provided in 01 NCAC 05B. .0321 prior  and conditions as the original contract period. to exercising a renewal or seeking a contract extension.  7.8.1 Contract Renewals  Contract renewals are provided for in the solicitation document. They may be exercised by the state as a matter of right and do not require the vendor to execute an additional contract document or otherwise agree to the extended contract term. 01 NCAC05A.0112. An notification should be sent to the vendor informing them that the state has chosen to  exercise a renewal option from the contract. 7.8.2 Contract Extensions  Contract extensions are another mechanism for extending the life of a contract. Unlike renewals, contract extensions are not provided fori in the original contract document. Both the state and the vendor must agree to a contract extension, and a contract extension document must be drafted and executed by both parties. 01 NCAC 05A. .0112.  Page 70  NC*DOA    SPO approval must be received for a contract term that exceeds three years. This approval must be received before an agency can enter into a contract extension. SPO approval for an extended contract term is required regardless of contract value. 01 NCAC 05B.0319. After the contract extension has been executed by the state and the vendor, the agency must post a public notification oft the extension to P&C's electronic bid system. The requirements of the posting are provided in 01 NCAC 05B .0320. Section 8: Procedures and Records 8.1 Procurement File Maintenance  A procurement file should be created for each procurement. 01 NCAC 05B.1903. Each file should contain all documents related to the procurement, including as applicable: Original offers ifi inj writing, or written documentation of verbal offers received Awritten, dated, and signed justification for award or cancellation  Worksheets and evaluations Tabulation of offers received Copies of purchase orders Related correspondence Negotiated contracts  Aw written, dated, and signed justification for waiver or emergency purchase  Reasons for receiving only one offer in response to a solicitation  Reasons for not accepting technical proposals Copies of any inspection reports (ifa applicable)  Copies of requisitions, purchase orders, terms and conditions, and freight bills Procurement files shall be retained in accordance with agency records-retention schedules. Procurement files should be maintained with a naming convention that allows for files to be  easily identified and organized.  8.2 Public Records and Confidentiality  Solicitation information: and documentationshal. be confidential until a contract is awarded, except where deemed necessary by the purchaser to develop a complete contractual document. 01 NCAC 05B. .0103. During evaluations, onlyt tabulation information shall be public record. Pricing may be withheld from the tabulation where negotiation is anticipated. After contracts are awarded, but before they become public, the purchasing agent shall review and redact information marked confidential by the vendor. Pricing shall not be  confidential.  Page 71  NC*DOA    8.3 Public Records Requests  The public may request to see an awarded or canceled procurement. This is formally called Public records are defined as all documents or materials made or received pursuant to law (or ordinance where municipalities are concerned) in connection with the transaction of public business by agencies of North Carolina government or its subdivisions. "Agency of North Carolina government or its subdivisions'shall mean and include every public office, public officer or official (state or local, elected or appointed), institution, board, commission, bureau, council, department, authority or other unit of government oft the state or ofany county, unit, special district, or other political subdivision of government. G.S.132-1. The public records and public information compiled by the North Carolina government, or its subdivisions, are the property of the people. Therefore, iti is the policy oft this state that the people may obtain copies of their publici records and public information free or at minimal cost. "Minimal cost" means the actual cost of reproducing the public record or Public records requests should be referred to an agency's Public Information Officer for  ap public records request.  publicinformation. assistance.  Public Record Categories  Documents Emails Papers Letters Maps Films Artifacts Books  Photographs Sound Recordings Magnetic or other tapes Electronic data processing records Materials made or received pursuant to law or ordinance in connection with the government ori its subdivisions  Agencies are required to make procurement files available as a public record. The following procedures are applicable when making files available to the public: 1) The public should submit a formal request for the desired documents. 2) Legally required redactions, including removal ofi information appropriately marked confidential shall be completed priort to public viewing. a) Pricing or total award costs are always public record and shall not be marked 3) Aminimal cost should be charged for use oft the state's paper, toner: and equipment. This charge cannot be more than the actual cost to copyt the records. Normally, the 4) Agencies are not required to create or compile a record that does not exist. Agencies may voluntarily elect to create or compile a record and may negotiate a reasonable  confidential.  charge cannotinclude employee time. charge for the service. G.S. 132-6.2(e).  Page 72  NC*DOA    5) Canceled solicitations that are anticipated to be reissued in the neart future shall 6) Dollar amounts awarded to specific vendors are available on P&C's electronic bid 7) Vendor complaint records are also public; requests for copies will be handled in the  remain confidential until after an award is made. system and are publicinformation. same way as copies from procurement files.  8.4 Redacted Information  Procurement files may need to be redacted to protect sensitive information before they are provided to the public. The public should not be permitted ini file storage rooms or otherwise be allowed to view files without an agency representative present. Personal identifiably information (PII)i is the most common category ofr redacted information. G.S.75-61 and G.S. 14-113.2(b) provide more information regarding PII. For procurement  purposes, commonly redacted information includes:  Social security numbers  Federal taxpayer identification numbers (EIN) Bank account or credit card information Information marked CONFIDENTIAL" Vendor-submitted financial documents  8.5 Record Retention  Except where state law provides tot thec contrary, procurement documents shall be maintained for fivey years after contract expiration dates, plus one additional year aftert the conclusion of any litigation, even ifbeyond the five-year period. Files shall be maintained individually for easy reference, whether maintained electronically or as hardcopy files. Agencies should retain contracts for the duration of any applicable warranty. Agencies should consult the North Carolina Department of Natural and Cultural Resources, State Archive website for more information about records retention requirements, public  records, and best practices. Section 9: Bid Protests 9.1 Bid Protests  Al bid protest is aj process by which a vendor wishing to protest an award by the state can present for consideration their request for relief. Bid protests are governed by 01 NCAC 05B.1519. A vendor initiates al bid protest by sending a written request to protest the award to the correct receiving entity, based on the contract amount. The protest letter must be received within thirty calendar days oft the award, or the protest is untimely and will  not be heard.  Page 73  NC*DOA    Per 01 NCAC05B. 1519, "Vendors" are permitted to submit a bid protest. "Vendor"i is defined as "a contractor, supplier, bidder, company, independent contractor, firm, corporation, partnership, individual or other entity submitting a response to a Solicitation." 01 NCAC 05A. .0112. Thus, a vendor must have submitted a response to the procurement at  issue in orderi to submit a bid protest. 9.2 Bid Protest Procedures  To ensure fairness to all vendors and to promote open competition, agencies and P&C shall actively follow up and be consistent in responding to a vendor's protest concerning contract Protests of contracts that exceed an agency's delegation are heard by the SPO. Protests of contracts valued less than an agency's delegation are handled by the agency. 01 NCAC 05B.1519. Agencies should establish procedures to handle vendors' protests for  awards.  contracts valued below their general delegation. 9.2.1 Protest Process Under Delegation  Protests for contracts valued under an agency's general delegation shall be heard by the 1) Vendor submits a written request for a protest meeting to the agency's executive officer or their designee within thirty calendar days from the date of award. The vendor's request shall contain the reasons why it has a concern with the award and 2) Within five calendar days from receipt oft the protest letter, the executive officer shall 3) Ifan meeting is refused: Within ten calendar days from the date ofr receipt, the executive officer shall notify the vendor in writing thati its protest met one oft the  agency. The below process shall be followed:  any supporting documentation. submit a copy to the SPO. following conditions: a) It was not timely.  b) It did not contain required information.  c) It was meritless, and a meeting would have served no purpose. Acopy oft the executive officer's decision letter shall be forwarded to the SPO. 4) Ifa meeting is granted: The meeting must be scheduled within thirty calendar days 5) Within ten calendar days after the meeting, the executive officers shall notify the vendor oft the results oft the protest meeting and the appeal rights under Article 3 of G.S. 150B. A copy oft the executive officer's decision letter shall be forwarded to the 6) Ifthere is any further administrative or judicial review oft the award, the purchasing  from receipt oft the protest, unless mutually agreed.  SPO.  agency shall notify the SPO in writing.  Page 74  NC*DOA    9.2.2 Protest Over Delegation SPO. The below process shall be followed:  Protests for contracts that exceed an agency's general delegation shall be heard by the 1) Vendor submits a written request for a protest meeting to the SPO within thirty calendar days from the date of award. The vendor's request shall contain reasons why it has a concern with the award and any supporting documentation. 2) Ifameeting is refused: Within ten calendar days from the date ofr receipt, the SPO shall notify the vendor in writing that its protest met one oft the following conditions:  a) Itv was not timely.  b) Itdid not contain required information.  c) Itwas meritless, and a meeting would have served no purpose. 3) Ifan meeting is granted: The meeting must be scheduled within thirty calendar days 4) Within ten calendar days after the meeting, the SPO shall notify the vendor oft the results oft the protest meeting and the appeal rights under Article 3 of G.S. 150B. 5) Ifthere is any further administrative or judicial review of the contract award, the SPO  from receipt of the protest, unless mutually agreed.  shall notify the Secretary in writing. 9.3 Bid Protest Meeting  Bid protest meetings are typically about one houri in length, but the duration may be adjusted due to complexity of the issues raised in the bid protest letter. The protest meeting isa an informal, non-adversarial meeting in which the protesting vendor has the opportunity tof further explain its position to the state. The awarded vendor may attend the protest meeting and provide a response to the protest allegations but is not required to do SO. Each party will be given a set period of time in which to present their side. Because iti is an informal process, not a hearing, evidence does not need to be presented, and witnesses do not need to be called. Counsel may attend and present on behalf oft the The bid protest meeting is an opportunity for the protesting vendor to further explain its position, fort the awarded vendor to provide. any comments in response, and fori the state to ask questions to further clarify the issues. The protesting vendor and the awarded vendor shall direct their comments to the state and not to one another. The state is not required to  protesting or awarded vendor buti is not required to do sO.  defend its position or answer vendor questions in the protest meeting.  Page 75  NC*DOA Admi    NC*DOA Department of Administration  Page 76  NC*DOA    $143-129. Procedure for letting of public contracts.  (a)  Bidding Required. - No construction or repair work requiring the estimated expenditure  of public money in an amount equal to or more than five hundred thousand dollars ($500,000) or purchase ofapparatus, supplies, materials, or equipment requiring an estimated expenditure ofpublic money in an amount equal to or more than ninety thousand dollars ($90,000) may be performed, nor may any contract be awarded therefor, by any board or governing body of the State, or of any institution of the State government, or ofany political subdivision ofthe State, unless the provisions ofthis section are complied with; provided that The University ofNorth Carolina and its constituent institutions may award contracts for construction or repair work that requires an estimated expenditure of less than five hundred thousand dollars ($500,000) without complying with the For purchases ofapparatus, supplies, materials, or equipment, the governing body ofany political subdivision oft the State may, subject to any restriction as to dollar amount, or other conditions that the governing body elects to impose, delegate to the manager, school superintendent, chief purchasing official, or other employee the authority to award contracts, reject bids, or readvertise to receive bids on behalf of the unit. Any person to whom authority is delegated under this subsection shall comply with the requirements ofthis Article that would otherwise apply to the governing body. governing body of the State government or of a State institution, proposals shall be invited by advertisement in a newspaper having general circulation in the State of North Carolina. Where the contract is tol be let by a political subdivision ofthe State, proposals shall be invited by advertisement in ai newspaper. having general circulation in the political subdivision or by electronic: means, or both. A decision to advertise solely by electronic means, whether for particular contracts or generally for all contracts that are subject to this Article, shall be approved by the governing board oft the political Thea advertisements for bidders required by this section shall appear at a time where at least seven full days shall lapse between the date on which thei notice appears and the date ofthe opening ofbids. The advertisement shall: (i) state thet time and place where plans and specifications ofproposed work or a complete description of the apparatus, supplies, materials, or equipment may be had; (ii) state the time and place for opening of thej proposals; and (in) reserve to the board or governing body the Proposals may be rejected for any reason determined by the board or governing body to be in the best interest of the unit. However, the proposal shall not be rejected for the purpose of evading the provisions of this Article. No board or governing body of the State or political subdivision thereof may assume responsibility for construction orj purchase contracts, or guarantee thej payments oflabor All proposals shall be opened in public and the board or governing body shall award the contract to the lowest responsible bidder or bidders, taking into consideration quality, performance and the In the event the lowest responsible bids are in excess of the funds available for the project or purchase, the responsible board or governing body is authorized to enter into negotiations with the lowest responsible bidder above mentioned, making reasonable changes in the plans and specifications as may be necessary to bring the contract price within the funds available, and may award a contract to such bidder upon recommendation of the Department of Administration in the case of the State government or of a State institution or agency, or upon recommendation of the responsible commission, council or board in the case ofas subdivision ofthe State, ifsuch bidder will  provisions ofthis section.  (b)  Advertisement and Letting of Contracts. Where the contract is to be let by a board or  subdivision of the State at a regular meeting oft the board.  right to reject any or all proposals.  or materials therefor except under provisions of this Article.  time specified in the proposals for the performance of the contract.    agree to perform the work or provide the apparatus, supplies, materials, or equipment at the negotiated price within the funds available therefor. If a contract cannot be let under the above conditions, the board or governing body is authorized toi re-advertise, as herein provided, after having made such changes in plans and specifications as may be: necessary tol bring the cost ofthe project or purchase within the funds available therefor. The procedure above specified may be repeated if necessary in order to secure an acceptable contract within the funds available therefor. No proposal for construction or repair work may be considered or accepted by said board or governing body unless at the time ofi its filing the same shall be accompanied by a deposit with said board or governing body of cash, or a cashier's check, or a certified check on some bank or trust company insured by the Federal Deposit Insurance Corporation in an amount equal to not less than five percent (5%) of the proposal. In lieu ofn making the cash deposit as above provided, such bidder may file a bid bond executed by a corporate surety licensed under the laws of North Carolina to execute such bonds, conditioned that the surety will upon demand forthwith make payment to the obligee upon said bond if the bidder fails to execute the contract in accordance with the bid bond. This deposit shall bei retained ifthes successful bidder fails to execute the contract within 10 days after Bids shall be sealed and the opening of an envelope or package with knowledge that it contains a bid or the disclosure or exhibition ofthe contents ofany bid by anyone without the permission ofthe bidder prior to the time set for opening in the invitation to bid shall constitutea a Class 1 misdemeanor. executed in writing. The board or governing body shall require the person to whom the award ofa contract for construction or repair work is made to furnish bond as required by Article 3 of Chapter 44A; or require a deposit of money, certified check or government securities for the full amount of said contract to secure the faithful performance of the terms of said contract and the payment of all sums due for labor and materials in a manner consistent with Article 3 of Chapter 44A; and the contract shall not be altered except by written agreement oft the contractor and the board or governing body. The surety bond or deposit required herein shall be deposited with thel board or governing body for which the work is to be performed. When a deposit, other than a surety bond, is made with the board or governing body, the board or governing body assumes all the liabilities, obligations and duties of a surety as provided in Article 3 ofChapter 44A to the extent of said deposit. The owning agency or the Department of Administration, in contracts involving a State agency, and the owning agency or the governing board, in contracts involving a political subdivision of the State, may reject thel bonds ofa any surety company against which there is pending any unsettled claim or complaint made by a State agency or the owning agency or governing board of any political subdivision of the State arising out of any contract under which State funds, in contracts with the State, or funds ofj political subdivisions ofthe State, in contracts with such political subdivision, were (d) Useo ofUnemployment ReliefLabor. - Nothing in this section shall operate SO as to require any public agency to enter into a contract which will prevent the use of unemployment relief labor paid for in whole or in part by appropriations or funds furnished by the State or federal government.  the award or fails to give satisfactory surety as required herein.  (c)  Contract Execution and Security. - All contracts to which this section applies shall be  expended, provided such claim or complaint has been pending more than 180 days.  (e)  Exceptions. - Thei requirements oft this Article do not apply to:  (1) The purchase, lease, or other acquisition of any apparatus, supplies, materials, or equipment from: () the United States of America or any agency thereof; or (ii) any other government unit or agency thereof within the United States. The Secretary of Administration or the governing board ofany political subdivision ofthe State may designate any officer or employee oft the State or political subdivision to enter a bid    or bids in its behalfat any sale of apparatus, supplies, materials, equipment, or other property owned by: (i) the United States of America or any agency thereof; or (ii) any other governmental unit or agency thereof within the United States. The Secretary of Administration or the governing board of any political subdivision of the State may authorize the officer or employee to make any partial or down payment or payment in full that may bei required by regulations oft the governmental Cases of special emergency involving the health and safety of the people or their Purchases made through a competitive bidding group purchasing program, which is af formally organized program that offers competitively obtained purchasing Construction or repair work undertaken during the progress of a construction or Purchase of gasoline, diesel fuel, alcohol fuel, motor oil, fuel oil, or natural gas. Purchases of apparatus, supplies, materials, or equipment when: (i) performanceor price competition for a product are not available; (ii) a needed product is available from only one source of supply; or (iii) standardization or compatibility is the overriding consideration. Notwithstanding any other provision of this section, the governing board of a political subdivision of the State shall approve the purchases In the case of purchases by hospitals, in addition to the other exceptions in this subsection, the provisions of this Article shall not apply when: (i) a particular medical item or prosthetic appliance is needed; (ii) a particular product is ordered by an attending physician for his patients; (iri) additional products are needed to complete an ongoing, job or task; (iv) products are purchased for over-the-counter" resale; (v) aj particular product is needed or desired for experimental, developmental, or research work; or (vi) equipment is already installed, connected, and in service under a lease or other agreement and the governing body oft thel hospital determines that the equipment should bej purchased. The governing body ofal hospital shall keep arecord ofall purchases made pursuant toi this subdivision. These records are subject Purchases of information technology through contracts established by the Department of Information Technology as provided in Article 15 ofChapter 143B Guaranteed energy savings contracts, which are governed by Article 3B ofChapter Purchases from contracts established by the State or any agency oft the State, ift the contractoris willing to extend to a political subdivision ofthe State the same or more favorable prices, terms, and conditions as established in the State contract. Purchases of apparatus, supplies, materials, or equipment from contracts established by the United States of America or any federal agency, ifthe contractor is willing to extend to a political subdivision oft the State the same or more favorable  unit or agency disposing oft the property.  (2) (3) (4) (5) (6)  property.  services at discount prices to two or more public agencies. repair project initially begun pursuant to this section. These purchases are subject to G.S. 143-131.  listed in the preceding sentence prior to the award of the contract.  toj public inspection. ofthe General Statutes. 143 ofthe General Statutes.  (7) (8) (9) (9a)  prices, terms, and conditions as established in the federal contract.    (10) Purchase ofused apparatus, supplies, materials, or equipment. For purposes ofthis subdivision, remanufactured, refabricated or demo apparatus, supplies, materials, or equipment are not included in the exception. A demo item is one that is used for demonstration and is sold by the manufacturer or retailer at a discount. (11) Contracts by a public entity with a construction manager at risk executed pursuant (12) Build-to-suit capital leases with a private developer under G.S. 115C-532. Repealed by Session Laws 2001-328, S. 1,e effective August 2, 2001. Waiver of Bidding for Previously Bid Contracts. - When the governing board of any  to G.S. 143-128.1.  (f) (g)  political subdivision of the State, or the person to whom authority has been delegated under subsection (a) ofthis section, determines that it is in the best interest of the unit, the requirements of this section may be waived for thej purchase of apparatus, supplies, materials, or equipment from any person or entity that has, within the previous 12 months, after having completed a public, formal bid process substantially similar to that required by this Article, contracted to furnish the apparatus,  supplies, materials, or equipment to:  (1)  The United States ofAmerica or any federal agency;  (2) The State ofNorth Carolina or any agency or political subdivision of the State; or (3) Any other state or any agency or political subdivision ofthat state, ifthe person or entity is willing to furnish the items at the same or more: favorable prices, terms, and conditions as those provided under the contract with the other unit or agency. Notwithstanding any other provision of this section, any purchase made under this subsection shall be approved by the governing body of the purchasing political subdivision of the State at a regularly scheduled meeting of the governing body no fewer than 10 days after publication of notice that a waiver oft the bid procedure will be considered in order to contract with a qualified supplier pursuant to this section. Notice may be published in a: newspaper having general circulation in the political subdivision or by electronic means, or both. A decision to publish notice solely by electronic means for a particular contract or for all contracts under this subsection shall be approved by the governing board ofthe political subdivision. Rules issued by the Secretary of Administration pursuant to G.S. 143-49(6) shall apply with  respect to participation in State term contracts.  (h) Transportation Authority Purchascs-Nowvilhsimding any other provision ofthiss section, any board or governing body of any regional public transportation authority, hereafter referred to as a"RPTA," created pursuant to Article 26 of Chapter 160A of the General Statutes, or a regional transportation authority, hereafter referred to as a "RTA," created pursuant to Article 27 of Chapter 160A ofthe General Statutes, may approve the entering into of any contract for the purchase, lease, or other acquisition of any apparatus, supplies, materials, or equipment without competitive bidding and without meeting the requirements of subsection (b) of this section ift the following procurement The competitive proposal method of procurement is normally conducted with more than one source submitting an offer or proposal. Either a fixed price or cost reimbursement type contract is awarded. This method of procurement is generally used when conditions are not appropriate for the use ofs sealed bids. Ifthis procurement method is used, all ofthe following requirements apply:  by competitive proposal (Request for Proposal) method is followed.  (1) (2)  Requests forp proposals shall be publicized. All evaluation factors shall bei identified Proposals shall be solicited from an adequate number of qualified sources.  along with their relative importance.    (3)  RPTAS or RTAS shall have a method in place for conducting technical evaluations of proposals received and selecting awardees, with the goal of promoting fairness and competition without requiring strict adherence to specifications or price in The award may be based upon initial proposals without further discussion or negotiation or, in the discretion of the evaluators, discussions or negotiations may be conducted either with all offerors or with those offerors determined to be within the competitive range, and one or more: revised proposals or a best and final offer may be requested of all remaining offerors. The details and deficiencies of an offeror's proposal may not be disclosed to other offerors during any period of The award shall be made to the responsible firm whose proposal is most advantageous to the RPTA's or the RTA's program with price and other factors  determining the most advantageous proposal.  (4)  negotiation or discussion.  (5)  considered.  The contents of the proposals shall not be public records until 14 days before the award of the The board or governing body of the RPTA or the RTA shall, at the regularly scheduled meeting, by formal motion make findings of fact that the procurement by competitive proposal (Request for Proposals) method of procuring thej particular apparatus, supplies, materials, or equipment is thei most appropriate acquisition method prior to thei issuance ofthei requests for proposals and shall by formal motion certify that the requirements of this subsection have been followed before approving the Nothing in this subsection subjects a procurement by competitive proposal under this subsection  contract.  contract.  to G.S. 143-49, 143-52, or 143-53.  RPTAS and RTAS may adopt regulations to implement this subsection.  (i)  Procedure for Letting of] Public Contracts. - The Department of" Transportation ("DOT")  and the Department of Administration ("DOA") shall monitor all projects in those agencies that are let without a performance or payment bond to determine the number of defaults on those projects, the cost to complete each defaulted project, and each project's contract price. Beginning March 1, 2011, and annually thereafter, DOT and DOA shall report this information to the Joint Legislative board or governing body of the State, institution of State government, or any political subdivision of the State unless the contractor and the contractor's subcontractors comply with the requirements of Article 2 ofChapter 64 ofthe General Statutes. (1931, ,c.3 338, S. 1; 1933, C. 50; C. 400, S. 1; 1937,c. 355; 1945, C. 144; 1949, C. 257; 1951, C. 1104, SS. 1,2; 1953,c.1 1268; 1955,c. 1049; 1957,c.2 269, S. 3;c. 391; C. 862, SS. 1-4; 1959, C. 392, S. 1;c. 910, S. 1; 1961, C. 1226; 1965, c. 841, S. 2; 1967,c. 860; 1971, C. 847; 1973, C. 1194, S. 2; 1975, C. 879, S. 46; 1977, C. 619, SS. 1,2; 1979, C. 182, S. 1; 1979, 2nd Sess., C. 1081; 1981, C. 346, S. 1; C. 754, S. 1; 1985, C. 145, SS. 1,2; 1987, C. 590; 1987 (Reg. Sess., 1988), C. 1108, SS. 7,8; 1989, C. 350; 1993, C. 539, S. 1007; 1994, Ex. Sess., C. 24, S. 14(c); 1995, C. 367, S. 6; 1997-174, SS. 1-4; 1998-185, S. 1; 1998-217, S. 16; 2001-328, S. 1; 2001- 487, S. 88; 2001-496, SS. 4, 5; 2005-227, S. 1; 2006-232, S. 2; 2007-94, S. 1; 2007-322, S. 4; 2007- 446, S. 6; 2010-148, S. 1.2; 2011-234, S. 1; 2013-418, S. 2(c); 2015-241, S. 7A.4(s); 2017-81, S. 1;  Committee on Governmental Operations.  G)  [Use ofE-Verify Required. -1 No contract subject to this section may be awarded by any  2021-80, S. 2.8.)